Investment Tools: Y Charts has introduced bond level data for over 6 million securities, allowing advisors to assess credit and duration risk, and compare bond ladders versus funds with enhanced visuals.
Market Sentiment: The podcast discusses the difficulty in gauging market sentiment, noting the S&P 500's extended period without a 5% pullback, suggesting potential volatility ahead.
Historical Comparisons: The hosts draw parallels between current market conditions and historical events like the 1929 stock market peak, highlighting the role of sentiment and contrarian indicators.
Media Influence: The financial media's focus on risks and systemic threats is seen as a reaction to past crises, with a tendency to amplify negative narratives for better ratings.
Gold and Diversification: The discussion covers the role of gold as a hedge or insurance in portfolios, contrasting its historical performance with other asset classes like bonds.
Speculative Investments: The rise of non-profitable tech companies and speculative stocks is highlighted, with a focus on the potential risks and rewards of investing in these sectors.
Housing Market Dynamics: The conversation touches on the challenges in the housing market, including high down payments and the impact of interest rates on buyer activity.
Consumer Spending Trends: Data from companies like American Express and Bank of America indicate strong spending among affluent consumers, with credit metrics remaining stable despite broader economic concerns.
Transcript
Today's Animal Spirits is brought to you by Y Charts. After a decade of near zero rates, bonds are back in the spotlight, which means clients are asking tougher questions. Is credit risk rising? How do ladders compare to funds? Are my income strategies still holding up? >> That's why Y charts just rolled out bond level data on more than 6 million securities integrated right into the same platform. Top advice is already used for equities, funds, and proposals. With this update, you can quickly spot credit and duration risk, illustrate ladders versus funds with client ready visuals, and deliver proposals that show the full portfolio picture, not just the equity sleeve. This is cool. A lot of advisers love the individual bond securities. So, do clients. So, tons of advisers are already taking advantage of this data. So, check it out for yourself today and get 20% off your initial Y charts professional subscription when you start your free Y charts trial through Animal Spirits. New customers only. Welcome to Animal Spirits with Michael and Ben. Michael, I told you I know you didn't want to talk about the AI bubble anymore, but I want to talk more about sentiment in general. >> Hold on. You're you're you're putting charts into my uh into my doc. I never said that. I never said I don't want to talk about the AI thing anymore. I merely said I feel like it's all we're talking about. Can't avoid it. >> Oh, okay. Two weeks ago, you said you wanted to do an entire episode with no AI talk. Remember? >> Impossible. >> Do you forget this already? >> Failed. >> All right. All right. So, I want to talk about the the difficulty engaging sentiment these days. So Bloomberg has this chart and they show that the S&P has gone nearly 100 days without a 5% pullback and the average is around 97. So we're right about there, which is kind of kind of crazy that it's been that long. Um, and this whole article was about like, hey, listen, turbulence ahead. Expect more volatility. We haven't had this 5% correction. It's coming. Um, and they did. Do you do you look at these AI takeaways from all these articles now? It's like the very top of every article now. Wall Street Journal, Bloomberg, AI takeaways. Nope. I still I still I still read the articles manually. Okay. The whole thing is just talking about how like stocks are due for a pullback. It's, you know, I my wife is still a Today Show watcher. Which one does your wife watch? Because >> Good Good Morning America. >> Good. Yeah. So, everyone has their one. My wife has She doesn't even watch it really. It's just on in the background. Okay. And she had it on on I think this was Sunday morning and the whole they had a whole expose piece Willie Gist talking about are we in an AI bubble? I did a little screenshot here of my TV. It it's weird because on the one hand you'd say listen, no bubble in history has ever had so many people call it in advance, but I think you could also say no bubble in history has ever had this many people that that are giving opinions all the time. So I'm reading I'm listening to not reading the 1929 book by Andrew Sorcin. That one on your list? >> I'm I'm going to do it the old fashioned way. I'm going to read it. >> Okay. Way too long for How many pages is it? It's way too long for me to read, so I had to listen to it. Credit to him. I I didn't even look at the back yet until just now. He's got Von Turnalow, Walter Isacson, Beverly Gage, and John Meechum writing reviews. That's that's uh that's the Mount Rushmore reviewers. >> Okay, that makes sense because this this feels like a biography in the sense that there could have been some stuff in the chopping cutting room floor. Okay, no offense. That's how I feel about all biographies, right? But this is it's a story and I'm a huge fan of the reading about the Great Depression. It's weird. It would be weird to say I'm a fan of the Great Depression um because that's obviously a really bad time in the history of our country. But he it's way more stories and anecdotes than I ever thought before, but there's a really in and ton of good characters and there's some that it's like some some that's a little too much, but then you hear these anecdotes and stories you never heard before. So he has a whole chapter on Jesse Livermore which is excellent and he talks about how there was this story in the New York Times in 1929 called the magnet of dancing stock prices and I actually found this. I think you showed me this. The New York Times has their archive, right? That's why I pulled up the actual story and um it's funny because a lot of it does and people keep asking Sorcin about like does this period time period kind of make you feel like the 1929 peak a little bit and so it this is from the article despite setbacks the broker's wires again become clogged with orders for stocks from all parts of the country. Tips fly about freely. Violent advances and declines in leading issues are a daily occurrence. This is the best part that reminds me of today. It is quite true that the people who know the least about the stock market have made the most money out of it in the last few months. And Jesse Livermore stepped in and he he essentially said, "I'm using this as a contrarian indicator. All the amateurs are making way more money than the pros. I'm shorting the market." And he >> he made he made like a hundred million I think in 1929 >> and he made a 20 ton of money. And this isn't this is an a quote from the article that I've never heard before. He said um stocks could be beat but no one can beat the stock market. >> I thought was a really good Yeah, I've never heard that one before. It's really really good. >> Uh yeah. Um so anyway, it talks about how he used this and he he used this this sentiment shift to short the stock market and made a ton of money. >> Can I ask you a question? You think Livermore was a there he is or was he a that guy? >> Well, they said he he really liked to show off his apartments and his cars and his nice clothes and so >> he might he might have been a this guy. Yeah, he wanted to be Oh, there he Oh, there he is. One of those guys. Um, but anyway, I just my whole thinking is I don't think that you can use these indicators as well anymore as you did in the past because there's just so much of it everywhere. It was it was very confined in the past. You wouldn't it wouldn't be shoved in your face all the time. I'm glad to hear you mention that because I feel like the noise of the sentiment that that's I've been on that corner for a while now and you could look at 10 different pieces of information data and make 10 different conclusions. Now, of course, the best is to just make a composite. But even then, which investors are you talking about? I've said this a million times. Are you looking at Schwab investors? because their Azax report paints a lot much different picture than what you're seeing on Reddit or Wall Street Bets or the Robin type of young like so and then to the point about the media the media covers the stories and the bigger the story the better their ratings and so they are dying for a bust right like that would be a very yeah that would be a great story so I think you're 100% right it's it's just it's very difficult >> to talk about indicators the way that we used to because how many over the last decade have we could we point to now listen once in a while they work obviously right like they're not they don't all not work >> but I keep coming back to Jensen Wang signing a bra and the Nvidia watch party was that two years ago at this point >> right >> now if you zoom out >> so many instances like yeah >> if you zoom out and this does become an 80% wash out which I very much don't think is going to happen but if that were to happen in the future 50 years from now, people are reading about today. Well, does it matter if these indicators were 24 months early in the grand scheme of things? Yeah. But to your point about the financial media, I've made the point that the financial media was cheerleaders for the dotcom bubble and and no one in the financial media called the 2008 crisis. They were all flat. >> They want they don't want to be embarrassed again. >> Yeah. So the fact that the financial media is more negative about everything going on, right? And and pointing out all the risks all the time, there's a reason for that. That's learning learned from past behavior. Um but I I I think it's funny though because you see so right now the the worry is what regional banks and um BDC's and maybe private credit and and there's there's so many of these worries. I put this chart in here about the 10-year Treasury yield back under 4%. remember 3 months ago when people thought >> treasuries are at 5% that means we're imposing fiscal discipline and bond vigilantes and here we go inflation is taking off and I think all these little things people worry about I think it's worth reminding people that the majority of them just kind of fall by the wayside and people forget like oh remember we were worried about that doesn't matter anymore >> well that's that's that's got to be your default position for most things now it doesn't mean that you're being complacent and you're not worried about risk >> because as investors risk should be first and return should who cares? They'll take care of themselves. So, you have to be disciplined and it's not to be, oh, nothing matters. But it's okay. How about this? If there's two extremes, everything matters and nothing matters. Probably nothing matters is is the better default position. And that's that's where I landed on this this BDC stuff. I've been doing a lot of reading on it. And the truth is, we're all guessing. Nobody knows. Nobody's nobody knows where the cockroaches are. Nobody's reading the loan documents. I know as much as everybody else. I read the same >> How about this? Sometimes there is only one cockroach. Sometimes it is your first rodeo. And sometimes you haven't seen the movie yet and you don't know how it ends, >> right? Yeah. I love it, Ben. Um, but the the so my default position with this is yeah, there's some bad behavior going on and there are some there are some bad loans being made. No doubt about it. There's no doubt about it. There's too much money coming to the space. People are are lack of days. There's no I have no doubt about it. But does that mean that this is systemic risk that is going to take down the financial system and BDC is the canary in the coal mine? Maybe it could happen, right? We'll see. But I don't that can't be that your default case unless you really know something that everybody else doesn't. Unless you really know. >> I'm sick of people warning me about systemic risks. Like I'm I'm at the show me point of stop telling me this could lead to something down the line. Show me when it does. That's where I am at because everything that people have warned us about, none of it has mattered. Right. Well, >> none of it. >> Most of it. >> All right. Speaking of hedging systemic risks, I wrote a blog post about why I don't own any gold. And it's it's a tough position to be in because So, here's our friend. >> Yeah. I would I would not be pounding the table on why we I don't we don't own gold. Like, it's, you know, gold is kicking ass. >> I'm not pounding the table. I want to explain myself. So, Meb Faber says, listen to his tweet. Going to be a lot of uncomfortable conversations at year end when people ask why their portfolio manager or adviser doesn't own any gold. been a menace this year. So, I thought like perfect time to explain the reasons behind why I personally don't own any. >> Well, we don't own we don't own gold for clients and there's there's people that are asking about it. >> Yeah. Not because gold is gold is a headline asset. >> Here's the here. Yes, it is. When it's doing well or when it's not doing well. Here's the thing, though. Like when me says there's going to be a lot of uncomfortable conversations. You could say that every single year about any single asset class. Why don't we own Bitcoin? Why don't we own biotech stocks? Why don't we own >> But but but gold gold is a gold is a different beast than all of those things. Gold is not biotech stocks because gold is when gold is flashing on the front pages of the of the paper of the USA today. >> It gives potentially uncomfortable feelings about the system, about the dollar, about confidence in in the economy, in the political system. Like it is its own beast. And people don't ask about biotech stocks or any other asset class the way that they own ask about gold. >> Yeah. And I and I heard from there was some crazy gold people who who gave me the business a little bit on this. Um, and it's funny because I the the real true gold bugs. It's funny. Even when gold is working, they're not happy, right? They're they're not because it's like, of course, the system's going to the system hasn't failed yet. Like they want the system to fail. That's the only time they're going to be happy. But there's a lot of people who wrote me and said, "Listen, I put 5 to 10% in gold as an insurance." A lot of people said use the word insurance for me uh for why they own gold. And I thought that that's a that's a completely fair reason. It's a hedge. It's an insurance. It's it's the dollar falling. It's all this stuff. And and I get it and gold is one of the most unique asset classes that there is. It really does march to its own beat. And I think so like the case I I tried to paint a nuanced picture here. Like I totally understand the case for owning gold. I just >> I do I do think last week you're you were a bit harsh on this podcast saying that like none of what they said came true. Like it felt like uh it felt beneath beneath you. You're punching people when they're winning. It felt it didn't feel didn't feel great. >> Okay. I I listen I just I it was it's more the charts than anything. It's a chart I was I wasing a chart crime. >> I know I know where you're coming from. You're thinking like, "Oh, the dollar is going to blow up. The system is going to melt down and therefore gold is going to be your savior." I know what you were saying, but in a vacuum it felt it felt uh harsh. >> I am an optimistic person and I'm anti-doomerism. So that that maybe that's where I'm coming from is that I I don't like the people who are constantly trying to use scare tactics. And so my page of course >> those chart crimes and stuff just kind of are but listen the people who own 5 10 15% or 20% in gold or whatever obviously they don't think the system's going to fall. It's an it's a diversification volatility rebalancing because that piece makes sense to me obviously like I I get that from a portfolio management perspective here. Let me just walk through why I don't my personal opinion on it. So, I did this thing in the in the in my post where I looked at the return history of gold and gold went crazy in the 70s mainly because Nixon ended the peg to gold with a dollar, right? So, it was up like 1,400%. So, that it's a huge and it was playing catch-up because it was pegged all those years. >> I feel like that that whole period the the the bubble and the aftermath sort of has to be removed from history because >> it is a true one of one will never happen again. So, it's almost like irrelevant a little bit. Now I know it also it also coincided with with inflation and so that's part of the story. So we can't do that >> oil shocks and >> so but my my point is if you look at gold in the 80s 90s 2000s and 2010s you had three out of four decades where gold was in a loss decade. So in the 80s and 90s gold and obviously part of that was the overhang from the 70s. Um but that whole period I'll be honest that that whole three out of four decades of having a lost decade and going nowhere. Um, now you could say I'm cherry-picking cuz if you start in 2000, hey, gold looks pretty good. You start in 2020, like there's time periods where gold does look better. >> I just that that whole period of of multiple decades in a row where you have you go nowhere. And now some other people said, listen, you're you're comparing gold to stocks. That's the wrong comparison. Compare gold to bonds. And if you look at the long history, like deodorant has the return history going back to 1928 for gold. And actually, gold returns going back that long are closer to bond returns actually. Um, and and obviously some people would say, "Well, why do you have to choose? I could do gold and I could do bonds and I could do both." You don't. >> So, and and I'll be honest, I I was wrong about this. I kind of thought Bitcoin would take the shine, pun intended, off of gold a little bit. >> So, that this it surprises me that Bitcoin didn't knock gold down a peg. I because I'm more of a I guess a techno optimist. Um, and I I would have thought Bitcoin would have had a bigger impact on gold. So, I was wrong about that. But that that's the reason. It's it's more of a market history thing for me than than anything. And and the people own it. I understand it, but I just I personally could never wrap my head around it. >> Fair. Anything to add? >> Um I mean this is it's such a big conversation. It's like I feel like you could spend an hour on this. There's a great book, The History of Gold or The Power of Gold by Peter Bernstein. >> Yeah, gold. Gold is an interesting unique >> and it's been around for thousands of years, too. So that that could be part of it. >> I guess the the only Yeah. Listen, I mostly I mostly agree with you. I don't look old gold either. We don't know if our clients, so we're we're on the same page. The thing that the thing that it's like again the the decade of the 80s you really have to take with a grain of salt because that happened after one of the greatest runs of all time, >> right? So I think it's I think it's more fair to look at like maybe rolling returns or how it diversifies the 60440 portfolio. Uh do you need gold? Obviously we don't think so. Do I wish we own gold this year? Absolutely. Um, I guess like anything else, I would say that know why you own it. If you don't if you didn't own it now, is now the best time to really dive in? I mean, probably. >> I think that's that's the point. I I But there's I think there's always going to be something that you go, man, I wish I owned that. Or so so uh Verdad Capital did this really cool chart where they show the US equity market in a 60/40 portfolio going back to 1975 and they look at what was the diversifying asset and and you see that see these colors how it changes. So it's in some instances it was international equities and REITs and gold and factors and fixed income and commodities and it changes every 2 to three years where it's like the this is the diversifying asset. Now you could say listen I'm going to own them all and as a someone who is a diversified investor I like being widely diversified but I also don't think that you can own everything. Remember following 2008 crisis in 2010s everyone talked about how you need to own managed futures and some people would say listen you have gold in managed futures and you'll be fine. do they just do it trend following. Um but to me that was like I understand the appeal for managed futures. It just doesn't fit in my portfolio purview and that's okay. >> I mean you >> and you have to be okay not owning everything >> right. You can own everything. You definitely can. But if you do, depending on the rapper in which you own it and the visibility in which you own it, there is a high degree of likelihood that at some point you're going to rip something out because it just doesn't work. Or I'm using air quotes, it hasn't worked over x period of time. And the more you expose yourself to different asset classes, the more likely you are, not everybody, but in general, the more likely you are to point to something say, get rid of this piece of It's not working. Why do I own it? >> That's the thing. And the problem is you do that and then you add something else that just did well and then you're investing in the rearview mirror. That's the problem. Yeah, you you just have to be comfortable with what you own and why you own it. >> Um I understand why people own gold. >> I just personally don't. That's all. >> Yep. Okay. Um >> remember this chart Mike Bird tweeted, "Who remember those Fed balance sheet S&P 500 charts?" You don't see those so much anymore. >> And it was Yeah, it's funny. We Yeah, great chart. Um this was the thing. It was all >> liquidity, Fed induced liquidity. And I'm not saying that wasn't part of the story because it absolutely was. But clearly it wasn't the whole story. And I mean AI, my god, not to I I can't not bring it back to that because it's true. Absent absent open AI and what they're doing and the arms race, maybe this would have maybe this chart not in fact not maybe this chart would have looked a lot different. It is highly possible that the S&P would have followed this chart and this relationship would have appeared to be rock solid. >> Were you a Scooby-Doo watcher when you grew up? Oh yeah. >> Okay. So, at the end of every episode, they would the bad guy would say, "And I would have gotten he would tell his whole plan." He said, "I would have gotten away with it if it wasn't for those darn kids and that dog." Right? That's the stock market of the US economy. It's always the bad guy saying, "I would have gotten away with it if dot dot dot dot." There it seems like there's always something and eventually won't be something. >> Sometimes sometimes those those cries are more valid than others. And I feel like this time it is it is valid. I think that >> absent absent open AI, the stock market would not have bottomed in October 2022 and uh we would be singing a different story. >> Yeah. But my point is the US economy, it's almost always something that saves us. >> You're right. And and speaking of October 2022, last week we spoke about um the the fun you have debating when a bare market started, when I when a bare market ended, when a bull market started. Well, it is it is unequivocally true that the market did bottom three years ago and Yuri Timmer wrote a piece on where we are year three of the bull market. The bull turns three. So, this next segment is sponsored by Fidelity Trader Plus. They allow you to trade seamlessly across all your devices from anywhere. If you want to learn more, check out Fidelity Trader Plus. Let's look at some of charts in in this note that he put out. So, >> some of the best charts in the game, too. >> He's um Does he have the crown? >> I mean, they they just look the I don't know how he does it, but um and if you missed it, he was on Ask the Compound with me a couple weeks ago. We we just did a whole thing where I just we went through all of his charts. Um it was fantastic. >> You know what? I I think you could crown him. He's certainly on Matt Rushmore, but he's um Yeah, he's the king of charts as far as I'm >> The good thing is is that no one's charts look like his. >> Yeah. Yeah. Yeah. All right. So, the first chart that I wanted to pull out, he looks at cyclical bull markets. the median length and he does them with dots and the size of the dots represent the cape ratio over that period of time. I've never seen it broken down this way. So this chart also it adjusts for inflation. So look at like for example look at the 1978 cyclical bull market. Look at look how tiny those dots were. >> Oh okay. >> Money, right? So, I think what stands out to me on this chart is this is right down the fairway because there's another line and you just go to the show notes to take a look at this if you're not if you're not watching the video. There's another line that shows like the average path or like a band and this is following to a T. >> That's interesting. So, this is so we had a textbook bare market like non-recessionary bare market and this is a now a textbook bull market coming out of it. >> Here's another great one. So, Yuren says the first year of a bull market typically begins with PE expansion as price discounts and earnings recovery and then in year two the baton gets passed to earnings growth as valuation compresses. Not this one. So, take a look at this. I've never seen it broken down this way. So, he has um he's showing the price from the low. He's showing the PE from the low and then he's showing the earnings per share from the low and the price as we mentioned already right down the fairway. PE on the higher side and earnings growth pretty much steady as it goes like right in the middle. Then the next chart shows this and this is the this is the key takeaway at least for me. For as much as we talk about bubble euphoria um expensive stocks peak earnings and maybe look at this. So Yuri's chart shows the stock market on top and on the lower pane he shows the EPS growth and the PE year-over-year. The PE has only grown by 1% over the past 12 months. Only 1%. Not a lot of multiple expansion there. 11% earnings growth. >> So yeah, the this recent period has been almost all earnings driven. It's fundamentally driven, right? That's >> exactly what you want to see. >> And it's not a huge spread either, right? It's it's pretty there's a lot of huge spreads on this chart. So look at what happened like in the rebound in November in uh the spring of the spring and the summer of 2020 that was all multiple expansion. You had earnings shrinking, duh, right? Obviously, and you had pees supporting the entire rally, >> right? Which is because in 2022 the PE ratio dropped by a considerable amount. >> And that was an interesting observation, too. In in 22 obviously multiples got crushed and earnings Yeah. earnings fell certainly or or they came off the highs. Let's say another weird period in time, you know, all everything's a weird period in time. >> Yes. No, this if you look at just compress this to this decade look at it's it's crazy. It's all over the map. And obviously that that's the COVID and supply shock and inflation and all that stuff. If anything, the most normal part of the period is right now, >> right? The the last 6 12 months or so. >> Sure feels it. >> Everything before that was crazy. >> That was a that was a JK. Um all right. Uh Balchunis tweeted $1 trillion with two and a half months to go. He's talking about ETF flows. Unbelievable. Unbelievable. >> So look at look at the biggest flows. Uh V, IVV, SGV, and VTI. And then then IBIT, which is the Bitcoin. So three out of the four are just big stock market ETFs. And then short-term treasuries. >> Um keep asking this question. I don't know that there's an answer that's not very simple. Where is all this money coming from? I mean, listen, part of it just has to be inflation, doesn't it? It is funny that three out of the top four S&P 500, but >> No, no, I'm saying like the fund flows like is it is it is it merely earnings? Like American people earning a lot of money and then putting it into the stock market? >> So, if we're looking at >> Yeah, I'm sure that's obviously the biggest source of it. Like, duh, but it just seems like so much money. I I would I would need to study this further, but how much of this could possibly be baby boomers retiring, rolling over 401ks into IRA, and that money is going into ETFs and and money going into financial advisors. >> That's a >> you need to see the other side of the equation with mutual funds to understand that. >> Okay. >> But >> yeah, you know what theory >> that's a that's a I'm going to say what that that's obvious. That is 100% happening. >> That that's probably part of it. So is that two-thirds of the pie or maybe more? >> Or I mean think about our business when we have people come to us who have individual stock holdings that they made a ton of money on. What do we what do they want us to do with that? Diversify it. >> Yeah. >> Out of the concentrated position into funds or Right. So I think that's probably part of it. It's not the whole thing. It's part of it though. >> Well, hold on. Maybe twothirds is underestimating it. It's earnings and it's and it's that what what's what other pieces can there be? where the money coming from. I you know where else would it come from? Can be just Yeah. >> earnings and uh 41k stuff. All right, we cracked the code. Good stuff, Ben. Um this is a great one. Since 2020, the value of equities, who tweeted, Daily Trek, the value of equities held by households has risen 300% for households under 40, 542% for the final 50% of households, and 50% for the middle 40%. The 10 to 50% of households. This is uh via Citadel Rubner. There's a wonderful chart. Um >> that's really good. This is really good. >> So the value of equities held by the middle 40%. That is steady as it goes for the most part. Now there was an inflection in 2020, but the under 40 this chart is worrisome and I love I love that people are in the game. I love that they're speculating. >> Wait, wait. You're worried about this? I think this is fantastic news. >> No, no, no. Worried? I don't know if that's the right word. Let's just say that I think that this one is the most susceptible to drop dramatically. >> Okay, that's fair >> because as a lot of these DGEN names, and I don't mean that disparagingly, um I would assume that this is not cool to say, but listen, I'm I'm sorry. I don't know what else to call it. A lot of these nonprofitable names that have gone up and to the right, which is what this crowd owns, they are going to crash. So I think my thesis is and again I think this is fantastic news that pe younger people are more represented by the stock market. This is great. >> So do I by the way three trillion that's that's a hell of a lot of money. Wow. >> If if you look historically the the really bad it takes a really bad period for young people to throw their hands and give up. So after the 70s when the death of equities happened it was young people who gave up. Older investors stayed invested. Young investors said I'm out of here. after the 2008 crisis and and we saw two 50% crashes, it was young people and millennials that said, "I'm done with the stock market forever." So, I think it would take, especially since people are more diamond handhy these days and used to crashes, I think it would take an extended period and probably a financial crisis to get young people to say, "All right, I give up. I'm tapping out." >> 100% concur. Can I take umbrage with something that I just said? Now, I've mentioned this in the past, but it's been a while. So, for newer listeners, there's times that I say stuff on the show that I acknowledge sounds completely idiotic and I'm about to do it where I will listen back to something I said two days ago and said, "Whoa, whoa, whoa. Nope, nope. You're wrong." And it's me. I'm calling myself out. So, we've got takes flying all over the place. So, if you disagree with something that I said, there's probably a good chance that I would say, "Yeah, you're right. That was stupid." Uh, all right. So, what did what do I disagree with myself 30 seconds ago about this inflection point that you saw in 2020? I think that if you were to look at the aggregate holdings of this younger cohort, it most likely is dominated by the mag seven names. Okay. It is most likely dominated by the blue chippers. Not >> there's probably there's probably more ETFs and index funds in here than most people realize. >> Yeah. So, it's not to say that those can't fall 50%. Of course, they can. But the names that I were just referencing, the nuclear, the uranium, the quantum computing, all the names that are up a,000% of the last 12 months, that's the names that I think are at some point going to crash. And I also think that that is probably a relatively small, let's call it less than 10% slice of the pie, >> right? Yeah. These people are the these people are the gamblers, too. They're they're on the Reddit or they're on their sports stuff gambling. Like this is just I don't think that crowd. It's going to take a really bad bare market to get that crowd. >> Yeah. And now I also I also think that these people are smart. Like they they know what they're doing. They know that the the music is playing. Now there's some true believers who think that these companies are the future. And maybe they are. >> And they've also they've jumped from the meme stocks of GameStop and AMC to these other to AI stocks to quantum computing to like these pe these people who are speculating this stuff. They've been jumping from idea to idea, have been stuck in something, >> have been have been making a hell of a lot of money. So, I don't begrudge. This is not shot and for if if it doesn't crash, I would. Great. Wonderful. >> Credit to you for saying that word correctly because it's always hard for me. >> Yeah. No, I'm I have no rooting interest for these people to lose money. I I don't like when people lose money. Um, all right. So, so at speculator_io tweeted a list of these companies. It's called the Zero Dollar Club. Um, and there's uh >> Wait, why is it zero? because they don't make any money. >> That's right, Ben. That's wild, huh? Forget about money losing companies, like companies that like basically have little to no revenue. Like serve Robotics is on here. We've joking about that cuz cuz I think it's a name that Josh might have owned in the past. Um, we were looking at their earnings report and it was it like $400,000 AR. I mean, it's like a joke. It's like a it's like a seed. It's like a star. It >> is funny that on this chart they list price of sales and price to earnings for everyone is at NA. Um, and then it shows the year-to- date returns and it's just it's it's hilarious. I mean, absolutely a wild scene here. So, >> so obviously the B and I I don't follow these these DGEN socks very closely. The the market caps for these were pretty small to begin with, but now they're all like relatively large companies. >> Yeah. >> Like look at the size of the market caps on these things. >> Yeah, dude. These are these are not small names. Um, >> they're not tiny anymore. >> So, what's the biggest name on here? Uh, as Space Mobile, AS is the ticker. Uh, I will admit I am not familiar with this name. This is this is a young man's game and I'm no longer a young man. That's 37 That's $ 35 billion. Ollo is 25 billion. Regetti is 18. QuantumCape is 10. Joby is 15. Uh, >> big companies now. >> And listen, these allegedly are going to be the companies that that change the world. So, I'm I'm hoping that they work. Okay? Don't don't get it twisted. I'm not I am not looking to pound my chest if these names crash. I think everybody's consensus that these names crash. >> There's no way that a pasta is going to change the world. Regetti Computing is never going to change the world. I'm I'm willing to say that. >> I'll also say like there is a reason that these stocks are are doing what they're doing. And now there's always a reason and it doesn't mean that it's not being taken 3,000 steps too far, but there's a reason. So Morgan Stanley has a national security index. Who tweeted this? I want to give this person credit. dividend talks. Um, so 39 companies across four major industries worth watching. They're looking at nuclear energy and uranium battery batteries and energy storage, rare earth and strategic metals and lithium. And a lot of these names are in this list. And so if these are deemed to be national security type stocks and the government gets involved and puts them on our balance sheet, lol, uh maybe maybe the valuations might not make sense, but maybe they might maybe they might be elevated for a reason. So, getting back to my Scooby-Doo analogy with all this stuff you're seeing, like if this economic recovery or economic expansion continues in the years ahead, people are going to go, "Well, if it wasn't for robotics and if it wasn't for self-driving cars and if it wasn't for all this this new energy sources, the economy and the stock market would have rolled over." That that's going to be the story if this thing continues, right? They're going to like It's kind of crazy to think we're people are debating the AI bubble, but we haven't even got the robotic side of things yet. Yeah, >> like I actually think here's my take. I think if an AI bubble does burst, I think it will be a glorious, glorious buying opportunity because the AI stuff is going to work eventually. Robotics is coming along. Like you could, if there's a 20 to 30% bare market because the AI stuff gets too far ahead of itself. It is going to be an unbelievable buying opportunity for the years ahead. >> I need a humanoid in my house that can do all sorts of tasks. one of them, uh, electrician, plumber, uh, cleaner, all this sort of stuff. I I need somebody I need a a robot to look at my Wi-Fi connection and figure out what the hell is going on because I've had Verizon in here three times. And you know, these extenders, there's I used to have an Orbee at my old house. Now I've got these EOS. Are they just complete? Are they just selling us because we buy it? >> I can't prove that it works. I can't even prove that it's on. I see a yellow light. It's not working. >> Yeah, I use some Google ones. I agree. It's hard to tell if it really makes your Wi-Fi better or not. >> I just feel like this >> I've got two or three of those throughout my house, too. I really don't know. >> This is the American consumer. Oh, an extender. Yeah. Yeah, I need that. Yeah, extend doesn't work. >> That is true. Um I don't know. But think about I I've said this before. All the baby boomers in the years ahead when they when they get to old age and need to be helped, like we're going to need we're literally going to need robots to help take care of them in old age cuz they're never going to leave their house, right? Like millennials aren't are too selfish to take care of them. Sorry, millennials. It's true. Yeah. >> Uh we're going to need robots to help take care of people. All right, >> here's this. This is worrisome to me. Uh a million people tweeted this out. Uh ETF Tracker says this. There's 13 new five times single stock ETFs that were just filed with the SEC. AMD and Amazon and Coin and Google and Strategy and Nvidia and Palanteer and Tesla and all the companies that you know >> and ether. Wait, so what happens on the day that Ether fell had a 30% draw down? Does this five times leverage? Does this do you do you owe this company? Do you owe the stock exchange money? How does this work? >> I mean, a million people made this joke, but this is the Onion headline of Gillette saying, "It we're doing five blades, which they did eventually, but I uh Come on, what are we doing here? This is This is the kind of thing to me that is going to lead to a flash crash someday." Like there's taking stuff too far. >> Yeah. Um Yeah. This is this is crazy talk. I also don't know how much I'm bothered by it. I would want somebody I would want like Nodic to say like, "Dude, this this is this is the type of stuff to Ben's point that does flash crash system cuz in a vacuum I don't give a about people gambling cuz that's clearly what this is, right?" And that's like obviously the the world that we live in. And so to each their own, >> there will definitely be people that use these. >> Now, if if this if this poses like market structure risk, then ban it immediately. To that point, Dave Dondic does weigh in here and he says, "If I was making odds here, I suspect that these will be nixed by the SEC staff as soon as they come back to work and clear off their desks. There's a government shutdown." Uh Dave says, "But that's part of the strategy. Thanks to the ETF rule 6C11 and recent generic listing standards, as crazy as these filings may seem, they are actually quote normal. And thus, if the SEC doesn't explicitly kaibash them, they go live in 75 days. If this shutdown drags into the end of the year, a whole lot of products are just going to appear without a weather eye and it will all come down to how conservative velocity. All right, whatever. This is crazy town. So, if their strategy is to sneak it through while the government is shut down and I guess from a business point of view, kudos to them, right? Like, you know, they're doing business and this is business. But my goodness, if this is where we are, this is uh Yeah, >> I know. I I don't love it. I I get it. people are going to do what they want and the pendulum obviously just keeps swinging. I I just if we're going to get the deregulation, can we please make it in places where it matters, especially the housing market? Just I like is the deregulation really just going to be we're going to let people blow themselves up with these different strategies. Let's make it easier to build houses. Come on. What are we doing here? >> Um all right, there was a article in the Journal of China betting it can win a trade war is playing hard ball with Trump. Last week, Beijing imposed sweeping restrictions on the export of rare earth minerals which are vital to consumer electronics and the tech industry. Trump then threatened additional 100% tariffs on China. All right, so China knows what they're doing, right? They're trying to mess with our stock market. They know that Trump is going to cave. I mean, they they have seen this movie before and they do know how it ends. >> It's now taco day. It's not just taco Tuesday. It's taco seven days a week. >> Yeah. Uh and speaking of China, I just want to make one thing. Last week we spoke about about uh about Beijing versus the United States, the book Breakneck, who's going to win. And when I said those people about China, just to be very clear, I don't mean the Chinese people. I mean the government. Right. I'm not disparaging a whole nation. >> Oh. Oh. Because they control everything. Yeah. >> Yeah. I'm not dispatching a nation of three billion people. I'm talking about the government specifically. And then >> No, no, you don't have to say that. Cancel culture is over. >> Ah, fine. Um, so I also wish that so I didn't finish listening to the book while we were having that conversation. And towards the end they were talking about like people defecting and leaving China and not thrilled what's with what's going on. And I wish I would like to amend my answer of last week like oh they're a tough opponent and who knows how it's going to play out. Who knows what's going I I they they are a very tough opponent and yes who knows how it's going to play out. >> Yeah, that was interesting. He basically saying a lot of the people who are wellto-do and not wellto in China are saying I I'm not going to I can't take this. I'm out of here. >> Yeah. So, it's not it's not like black or white where there's going to be, okay, here's the winner. Here's the loser. Like, it's obviously shades of gray and everything else, but but if I we're gonna win, like I How could you just not believe in in in freedom and human rights versus a centralized authority authoritative decision maker that gets to do whatever they want to their people? Like, so answer amended. We're we're we're going to win to the end of the >> Here's the thing, though. I I I have faith in the US system as well, but in something like this, in a trade war, they can take pain way more than we can. So, in a trade war, I would put my money on them. Like, >> yeah, because they don't give a They don't they don't care about their citizens and their the livelihoods of their people the way that we some of the stuff they described in the book is is truly horrific And they the the ability for them to tolerate pain on their society is next level compared to ours. >> We can't as we should. >> Yeah. So the fact that we did cave and it it it's better late than never I guess. But if you after reading that and you and I are still macro tourists, but now I think we consider ourselves like 20% China experts. Um if you read that read that book or listen to the book, you you realize like we never had a chance in this trade war against them. The way that they produce products and how far ahead of >> laughing. >> Yes, they've been laughing this whole time. Um so the Wall Street Journal says the US is tiptoeing away from many of Trump's signature tariffs. Uh, apparently they're exempting a lot of the products because they're goods that the U we can't make in the US and can't produce in the US. Um, and duh, of course this makes but at this point then we should just probably take them all back and just like let's let's chill here because it does seem like it's all small businesses that are the ones that are dealing with the pain here. The large businesses have the margins. If they're dealing with they're fine. That's why the stock market hasn't cared as much because someone asked I think my dad asked me a couple weeks ago. He said, "Man, I guess I was totally wrong about these tariffs because I thought for sure it was going to sink the economy and the stock market if you just look historically how bad tariffs can be." And I told him like, "No, you don't get it. They they went back on all the biggest stuff that impacted the biggest parts of the economy in the market. That's why it's still having an impact just in different different ways." >> Totally. Um, and when I say totally, I have to admit I wasn't listening. I was typing. I I apologize. That was rude. But I had to I did have to send something. >> That's okay. The over under for parlay on how many times Michael's gonna ignore Ben for this this episode was set at four and a half. >> Oh, under that that's one time. >> All right, that's at least two. All right, so there's a chart from the Financial Times showing the heavily shorted the heavily most heavily shorted US stocks have raised higher this year and it shows the most shorted stocks since 2020 versus average US equity returns. And so this is the top 250 stocks that are he in a heavily shorted basket with a market cap above 300 million. Um >> that just quote >> it has not just outperformed recently. It has literally outperformed the entire decade now. It's raised way higher recently. Now I have I have two ways of looking at this chart. Okay. One is man this stuff is out of control. This is insane. Like speculative whatever. The second way to look at this is why are hedge funds so bad at shorting stocks? >> Well, there's a third way. There's a third way. >> Okay, >> so the first one is what was the first one? >> This is a speculative. This is crazy. It's so speculative and oh my gosh, this control. >> Yes. Why are hedge funds so bad at shorting? I know they're so bad at shorting. I think it's >> obviously they did not learn their lesson from the GameStop fiasco. Correct. That's surprising to me. >> All right. So it's a combination of speculation unleashed on society and in trading apps the likes of which we've never seen, right? Bucket chops >> Reddit Reddit one >> bucket shops made it very difficult to speculate >> and even in the 60s right when when these these brokerages got just literally they they couldn't fill all the orders. Remember that one was what was that book? The go-go years once in Gokan one of the John Brooks books. >> Yeah, go years. Okay, the other part of this potion is in a technological revolution like we're in right now. The money losing companies that people would short and say these aren't real businesses. They get the benefit of the doubt because you are in a believe everything bull market. >> Yeah. Right. It's funny though. >> So all of all of these names like yeah, this is a speculative bull market with new technologies. The companies aren't making money because what? They don't need to, right? Like they're they're just they're not there yet. It's like that thing in um in in Silicon Valley. No, no, no. Revenue is the worst. Don't show any revenue. >> So it's funny though because I I tweeted about this and I gave my two things like saying one, speculation is out of control. Two, hedge funds are terrible at shorting. And Jim Chainos, a fame short seller, replied to me and said, "Even another way to put it, despite clear outperformance from such stocks, long only managers still generally underperform the market." And it's like everyone loses. But the thing is, this this decade is literally the only people winning are retail. >> Yeah. >> Like retail dgen traders or retail just I'm going to buy what I know. Those are the only people outperforming the market. >> As uh as somebody who is not on the other side of those people, you love to see it. Now, I can't imagine the frustration from the professional investors >> fundamental head. I'm I'm guessing like a David Einhorn or something like that would look at balance sheets of >> I can't I can't I can't I can't imagine the pain of I this doesn't make sense. I've seen this movie before. I can't imagine what that is like to live through. Um and I'm happy that I that I don't >> short selling stocks just it's you have to be wired differently. I I would never be wired to try to short anything. >> Oh, no. I'm a sheep. I I I I need I can't I can't take the the pain of people being mean. >> All right. This is interesting. Let's talk about crypto. This is from Kelchi. They have a bet. Will Bitcoin be above $200,000 by 2027? And I think the the it's does it hit that at any point in the year, which is not that far away. And it's essentially it's a little it's like 53% say yes above 200,000 by 2027. Feel like that's that's exactly where the odds should be. Feels like a coin toss. >> Really? Like a a double essentially in the next two years and a half. Two years. >> Yeah. >> You think that should be a 50/50 proposition? >> I mean um >> that seems those odds seem way too high for a double. >> Okay, then bet. No. >> I All right. I think I I >> I mean if this if if it's free money, Ben, pick it up. >> All right. Obviously, it's not free money because there is the the tail Oh, there's that Grand Rapids hedge right there. >> Yes, but I that that I'm sorry, that number should be 25%. >> Okay, then that's grossly mispriced and you should pick up those dollars. >> Yes, I think I will. How's that sound? No, I I don't do these prediction markets. Come on. Kind of degenerate. Um, all right. Let's talk housing for a second. You just bought a house. Um, so this has nothing to do with your purchase, but I think it's it'd be really hard to be bullish andor positive on the housing market right now for a number of reasons. Uh, here's some charts from Red Fin. Uh, the home sit on the market a lot longer. So they, this is median days on the market has gone from like 20 to 50, which is a lot. It's going up and to the right. Um, shares, most houses are selling for under list price these days. Uh the median down payment obviously has hit a record high. This is kind of crazy. So it's $70,000 uh on a US on a median home these days. This is surprising to me though. Um where's the chart? Oh, I didn't put it in here, but they they show that the average down payment is still roughly 20%. I'm surprised people or the median down payment. >> I'm surprised people haven't lowered that. Um but listen to this. So this is it seems to me like it's just the people with it's a shrinking group of people who are can be the buyers. And you mentioned this. You said like listen, we had like one or two people check the house out essentially, right? It was a small pool. >> So this is from a Red Fin article. With the housing market in a downturn, the people who are buying are those who are financially comfortable, secure in their jobs, and have money ready and waiting in the bank for a down payment. Said this guy who's a agent in Austin, Texas. For example, a few months ago, I helped a buyer close on an $800,000 home with a 50% down payment. They were able to liquidate stocks to make a 400,000 down payment without thinking too much about it. And now their monthly payments are lower. That's the wealth effect right there. >> Yeah. Austin is one of the worst areas of the housing market right now. >> Yes. Texas and Florida sound like they're in in a kind of a world of pain. And I don't know. I'm starting to think like the people have people have decided like listen the prices are just too high in a lot of a lot of areas >> and I'm just going to sit out. >> Okay. I I am on the other side of this. I I I don't think it's hard to be bullish about housing. I think that um >> what's your bull case? >> Rates come down. Rates continue to come down. No, that's it. That's the whole king kaboodleoodle. I don't think it's a down payment per se. I think it's uh I think it's the monthly payment. It's just crushing people. >> I' I feel like I've been on that corner for a while now and I'm I'm wondering if the the level of rates is lower than we assume to get people to really because rates have been falling this year. >> I I think we're right there. Like I think that like once we get to five and a little bit under, I think I think housing activity can explode. >> All right. I I've had that same feeling for years now. I'm starting to like backtrack on it a little bit. >> I don't know that I'm saying that prices are going to explode higher, but I think that activity is going to I think activity could moon. >> I still think that there's a lot of people >> I don't think people stopped wanting to be in a house. I think it just became completely unaffordable. >> I also think that >> Go ahead. The difference between buying and renting in some places is so wide now that I think a lot of people just said fine, I'll just keep renting. It's not worth it. >> Yeah. Well, that is that is definitely what happened. >> All right. Um cool chart from we we talk about this all the time like am I rich? Well, tell me where you live. Right. >> Right. Um flowing data has this cool chart where they they broke out housing costs by state. Um and it's are you paying more or less than the national average. Right. And it looks like Alaska and Delaware are right at the national average. Of course, places like Washington DC, California, New Jersey, these places are way above. So, California is 60% higher than the national average for housing costs. Um, but it's funny that there are more states that are below the average national the national average than are above it. So, the places that are really expensive, California and Hawaii and these places, they pull up the average a lot. It's a huge huge difference. >> Yeah, this is really good stuff. >> Yeah. Anyway, >> um all right, let's do some let's do some quarter stuff. I uh I do keep saying this. I do love hearing from the companies. Um and we've had people say like, "Mike, you keep saying the CEOs won't lie. What are you talking about?" All right. I think what I'm saying is >> that is that that's a fair push back. >> Uh totally. So, let me be let me be clear. If they are forced to report every 90 days, the ability for them to hide parts of the story that they don't want you to hear goes up dramatically because if you give them 180 days, they can maybe think that they could figure it out. That's human nature. Don't don't tell anybody, we'll figure it out. >> If you report every 90 days and there's cockroaches and you don't tell shareholders, you're out. Your stock will get crushed. the board of directors will remove you from the position if you lie to your investor so blatantly. So, are there a million examples of that happening? Yes, there are. Absolutely. Um, and I think that if you were to if you were to remove the 90-day increments, that would only happen with an increasing uh amount. >> I agree. The the level of analysts looking into things and asking questions, >> they kill you. So, I only mean that that CEOs are incentivized to tell the truth only because everything's public. That's all. That's all I'm saying. If they could lie, oh, yes, they would. >> Absolutely. >> And obviously, there still will be cases of fraud, but it's it's got to be so much harder today than it was in the past. >> Yeah. >> To to to really fool people. >> Yeah. So, all right. Um, AMX, uh, AMX is just AMX is in the absolute sweet spot of this K-shaped economy. They are a premium product for premium spenders and they are killing it. So, their total build business, it's just it's 6% 8% 6% 7% 8%. That's year-over-year growth. And these are not small numbers. Um, and goods and services and travel and entertainment up 9 and 8% respectively in the recent quarter. Here's the chart that we share every year, um, every quarter. And it just continues to blow the face right off my body. Look at the year-over-year growth of the younger people. Gen Z is 39% growth. Millennials growing 12% versus baby boomers are only growing 4%. And if you look at a percentage of the total, Gen Z is only 6%. With 39% growth, that will continue to to creep up the the the percent of the total. But look at millennials, dude. Millennials are 30% of total spending, higher than baby boomers. How about that? How how crazy is this? Millennials are spending more at MX than baby boomers. Huh? >> Yeah. That is surprising. So, a lot of people would say this is this is bad news, but um >> bad news. >> What's the bad news? >> That people are spending more on credit, but I >> this No, no, no, no, no. Ammex is not a credit card. Ammex is a charge card and you pay this >> Ammex people are not people are not relying on their AMX to make ends meet. That is not what's happening. And to that point, their credit metrics no change. Percentage of card member loans and receivables that are 30 p 30 days past due 1.3% for the last five quarters. These are now again does this speak to the entire economy? No. These are premium spenders. But net write- offs too. There's nothing here. People with money are continuing to spend money. But look at their net card fees. Ben, look at the next chart. >> Yeah, I know cuz I pay them. >> So it was it was a billion dollars in Q3 2019 and now it's $2.6 billion. >> I wonder how much of that is the annual payments. >> That's what this is. That's what this is. That's, >> by the way, speaking of credit cards, this is another one that was Do you remember how many news stories there were about when the US credit card debt hit $1 trillion? >> Oh my gosh. A trillion dollars in credit card debt. >> What's it now? >> 1.2 trillion. It's at 1.2. This is from Y charts. Uh, as of Q2 2025. And guess what? I actually view the increase in credit as for most people, like you say, it's probably a positive because they're feeling good and they're okay. And you're right, most of them pay it back off. So it doesn't it doesn't matter that much, >> right? >> It's an expansion of the pie, >> right? Um all right. So let's talk about Bank of America, a company that serves more or less Main Street, Main Street America, right? Bank of America. All right. Look at their asset quality net charge offs and their net charge off ratio. Is this going higher or lower? Ben, it's >> falling. >> Total net charge offs of $1.4 4 billion decreased by $158 million from the second quarter. Provision, >> how tiny the percentage is, >> it's nothing. Provision for credit losses also down%. >> And if you look at if you look into consumer net charge offs and you look at credit cards falling, Ben, in the first quarter of the year is 98 basis points, down to 90, now down to 82. I'm sorry. I I I know that there are people struggling. Broken horse here. There always are. But >> you said broken horse. >> Broken horse. Broken. What? A dead horse. Beatating the dead horse. Broken wheel. >> You just put broken record. >> Broken arrow. Broken arrow. That's what I meant to say. >> I think you combine broken record dead horse. Wait a minute. I can't remember. I We've do so many podcasts. Sometimes they all merge together. But you asked someone a few weeks ago like if you had one indicator in a few years to know if you're right or wrong, what would it be? And I feel like for you credit card companies, that's your indicator. >> I feel like if >> this is it. I don't don't I don't care about the stories in the journal that are interviewing random people. >> Show me the data. >> Right. We found this one person who is struggling because they have a low income. Of course you did. There's a lot of them. >> Show me the data. And matter of fact, somebody sent us a video that I watched. It was on PBS about the K-shaped economy. And it's it's it's sad as I hearing these personal stories from people like on an individual person basis. It's it's horrible. I hate that there are people struggling. That's not unique to today. There are always but if you look at the aggregate data it is not showing what they want you to believe. >> So I just put the finishing touches on my new book. I'm handing in the edits this week. It's done going away. It's going to come out in the spring. Um and I write about the Great Depression a little bit there. And even after the roaring 20s, which is like the biggest one of the biggest booms for retail households ever, like they got all these new fancy new things in their houses and they borrowed on credit for the first time. By 1929, at the peak after the great decade, it was a one of the better decades we'd had at that point. Um 60% of US households were below the poverty line. >> Wow. >> So like no one no one had any money. Um, and so it's it's like you said, people point to these things and obviously it is sad, but it's an improvement on the past, which is hard to wrap your mind around sometimes. >> Yeah. Speaking of the past, um, one of the books that I'm listening to, and I'll talk about it maybe next week if I finish when I finish it. uh historical records and all these historical books you mentioned the 1929 you know where a lot of the qualitative the good stuff comes from it all comes from diaries >> right yes people kept track of stuff >> right that's what >> my grandfather had a diary we found them when he died and uh reading them was actually pretty brutal >> yeah you know what our diary is called Twitter >> yeah the the yeah prior generations did not have easy lives um >> your your like great grandchildren are going to be like wait my dad my great-grandfather created this pie chart >> yeah he just posting all all well well for for a period he wasn't and then he grew up >> but I mean I the Hamilton one all of it it's based on letters they wrote to people yeah it's it is kind of crazy that's how people because they had they had nothing else to do what else are you going to do besides write a letter at night by candle light TV people had nothing to do >> Bill Simmons always talks about like future generations are going to think Caralone was the greatest power forward of all time and that's why he created this sort of line in the sand arbitrary metric >> that cuts off Carmealone I wonder if future generations are just going to like look at headlines as the arbiter of truth. Like just they're going to look at Google searches and newspaper articles as if that represented the the reality of what was happening. >> I think history is going to be rewritten a million times because there are so many opinions now. I think in the future people are going to be able to look back and pick and choose and they're going to be able to create the history that they want. So it's history is going to be very hard to discern going forward. >> It'll be a choose your own adventure. Speaking of that, I had this I had this really dumb, obvious, not profound thought the other day about because Kobe Kobe is reading uh Goosebumps. I told him to get see if those books were still around. So, he got one of the ones and I was like, "Oh, man. I remember this from my childhood." Yeah, books don't disappear obviously, right? We're reading books that are hundreds of years old still. And I was like, "Oh, wow. Good. Goosebumps is still around." Uh, yeah, of course it's still around. >> No way. >> Yeah. Uh, all right. This was a this is a this is a tweet on the internet from boringbiz people wildly underestimate how hard it is to be wealthy. The bull market has cooked everyone's brain and reality is that almost people that most people will not come out wealthy on the other side. Many will be stuck as our paper wealth evaporates. Being sustainably wealthy is grueling, requires years of hard work and building up skills and relationships. The people trying to tell you that that you can side hustle or day trade your way to wealth are selling a complete lie. I agree with most of this. I fully agree with that last sentence. >> I do. I think that most people will not come out wealthy on the other side. Depends what the other side looks like. Um, so you could you could, you know, quibble with that maybe on on where the market is in a couple of years. But the people the people trying to tell you that you could side hustle or day trade your way to wealth or some complete lie. Amen, brother. >> I agree with that. I actually think I disagree with the first part of it, though. Um, I think it's never been easier to be wealthy than it in the past. We talk about the the Vanderbilt stuff and them squandering it all. That would never happen today. I think there are so many experts and advisers and consultants and lawyers these days. If you're an extremely wealthy person, it's never been easier to hold on your wealth. >> Yeah. >> Yeah. Fair. I get Yeah. I guess he's probably talking to like the self-directed young men >> that are 23 that think that like they're going to be wealthy for the next forever and ever. And I think for that cohort Yeah. He's right. >> Yes. Right. And yeah, the paper wealth thing, it's true. It's not real until you until you make the sale. Right. >> Yeah. >> Um on the other side though, you can say like, listen, if I don't sell, I don't lock in the loss, >> right? >> Zero. Am I right? >> All right. This is nuts. Speaking of wealth, uh our colleague Patrick Haley shared this. I think it was a Boston Globe article um talking about how to deal with like cognitive decline as you get older and health problems and how how are the baby boomers going to deal with this? Um, and they show this chart that shows uh wealth and death gap of US adults over 60. And it breaks it down by people over 60 and what part of the wealth cohort they're in. And so the top 10% the death rate is like 11% and the average age of death is 85. If you go down to the bottom 60 80% the death rate is closer to 20% and the average death age of death is 79. So as you go lower down the income scale or the wealth scale, the death rate increases and the average age of death is earlier. This is this is a crazy chart, is it not? This is nuts. >> Yeah. Also, what you would the numbers are are are startling, but also what you would probably expect. No, >> I guess I just didn't expect the gap to be that large and that. So the bottom 80 to 100% the average age of death is 76. If you go up to the top 10%, the average age of death is 85. >> Yeah. >> Nine-year difference. That's crazy. >> It is. >> All right, we got to talk about $50,000 cars. I This is just my beat, I guess, because a million people sent me this story about how this the average the average price for a car is now $50,000 according to Kelly Blue Book. Adding to the sticker shock. More than 60 models had average prices of more than $75,000. Um, insane. How much of this is attributable to inflation, which is obviously big. And I think the average price of a new car is up 25% since the beginning of the decade, right? And then we have all these new sensors on the cars and the cameras. And so like the Apple CarPlay, the screens there, there's more stuff in them. So in that in that sense, it makes sense. Cars would be more expensive. But how much is this how much of this is also just people buying trucks and SUVs as opposed to sedans? Like I'd love to know what what percentage of that increase is because of that? It's got be a big part of it. I guess I I suppose you can still get an accord for I don't know 35 38 something. >> So Arbor data and science wrote about this. They they write the average age of the US passenger cars on the road up until the right since 1995. It was 8.4 years. Now it's 14.5 years. They also say that the Toyota Camry, the bestselling car in the US, uh is more affordable than ever. They show it adjusted for the median hourly wage. It used to take 1,600 hours. Now it only takes a,000 hours. >> So >> that's it. That's very interesting. >> But but here's the other thing that I was thinking about. Yeah, 50,000 for the average car does sound nuts. I think that a lot of the SUVs are pulling this up and maybe some of the high-end cars are pulling this up. >> Yeah, it said the luxury vehicles definitely are pulling it up. >> All right, but think about it this way. Because cars are on the road longer than they ever have been because cars have so many more pieces of technology and gadgets and are more durable. It's sort of like the stock market. Like, yeah, the multiple is higher. It should be higher. It's better companies. Is it not the same exact thing with the cars, >> right? The >> notwithstanding the piece of that I drive, >> but Oh, and speaking of pieces of So, my my uh car is my lease on my Wrangler Hybrid is up in April. So, I called my broker or text him and said, "Hey, Steve, I've got uh I'm like six months out. Can I can I get out of this now? Like, the summer's over. I'm not going to take the roof down. I want to get out. He goes, "Uh, maybe. What's your VIN number and how many miles you got?" He goes, "Nope, you're 10,000 underwater." He goes, he goes, "You're you're paying the lease off and then you get a new car." >> All right. Um, not to throw shade here, is it time to fire your car broker because every time you get a new car, you're underwater like immediately. >> No, these this >> an insane amount of money. >> This had nothing to do with him. Um, all right. On the other >> Oh, wait. Duncan Duncan sends us that a new Accord starting MSRP is 28,295. There you go. So you you drive a car long if if this concerns you, you drive a car longer or you get a sedan or so like there are ways around this if if that number is sticker shock is so big for you. But I'm guessing most people will just say screw it. I'm taking an 84month loan now. I don't care. >> Okay, >> that's where probably most people land. Other part of the car story is headlife in Bloomberg. Underwater car loans hit four-year high and new signs of distress. Just over 28% of tradeins toward new car purchases carried negative equity, the highest level since the first quarter of 2021 according to Okay. The amount owed on those so-called underwater loans was $6,900. Not nice in the latest quarter. Um I think that a lot of this was supply chain COVID issues. I also think, hey, guess what, headline writer back, it's not even where it was in 2019. And was anybody writing about this story in 2019? Did anybody care about underwater cars in 2019? Nope. >> Yeah. Aren't most cars underwater by definition? You drive it off a lot and it's 20% less than when you had >> Exactly, Ben. It's not even where it was in 2019, >> right? 2019 it was 34%. >> Yet here we are. And I'm not mad at journalists. I know I've been like hard on them. Like I'm This is the business, okay? and we all do what what what is >> right. No one was talking about this 2019. >> It wasn't a story at all. Nobody gave a And in fact, getting back to why I enjoyed listening to the company call so much. Ally kind of exposed to the auto market. So Sanji Saccharani and analyst asks, "Okay, obviously lots of jitters around some of the cracks that we've seen in subprivate auto and just broader consumer credit trends. Michael, it seems like your metrics don't necessarily suggest a lot of that." Um, okay. So the CEO said, uh, I appreciate there's a lot of macro uncertainty in the environment, but we're not seeing that impact our credit performance. And so we feel good about where we are, where what we're seeing right now. Credit performance day data. Okay, look at the net charge offs. Do you see anything there? Is it going up to the right or is it going down to the right? Look at the delinquencies, Ben. Is it going up or is it going down? This is the this is one of the biggest sum prime lenders in the world. No, >> just wait. Hasn't happened yet. It's going to happen. >> So, um Okay. Uh I saw this morning um on Instagram an image of somebody who looked a lot like Rocky on the beach running with the dog from Rocky and it said, "Oh, I play Rocky." And it said, "Nope, no, no, no, no, no, no, no. We're not doing this. We are not doing this. I don't want a remake of Rocky." No. Hard no. And good news, it's not a remake. It's it's the making of Sylvester Stallone making Rocky, and that I'm in for. >> What documentary? Okay. >> Yeah. >> All right. >> That I'm in for. All right. Daniel tweeted, "I can't believe it's been two years since we brought in audiobooks, premium, Spotify, uh, blah blah blah blah. Audio listening hours up 37% year-over-year." >> It does feel like I've unlocked a new form of of learning in my life with Audible. It feels good. >> Yeah, it does. It feel It feels so much better than listening to most podcasts. a lot of the garbage I listen to. I still have some garbage that I listen to because >> I listen I listen to Sean and Chris uh talk about the best horror movies of 2025. Um and I loved it and I do love it, but it feels nice to mix in a little bit of uh education every now and then. Um all right. Uh two quick things. I know we're running long here. Sorry, Duncan and team. Um so I got the house that I bought. There's a bar in the basement area and we don't really have like a place for the kids to play. There's no like there's no that that is the basement. There's no up, you know. So, >> the great thing is eventually the kids graduate from play areas. We took the play area and gutted it and turned it into a media room. >> Yeah. >> Didn't didn't need it anymore. >> Yeah. Um I can't wait to get there because I'm I'm going the other way right now. So, there's a bar in the middle of the room and I love it cuz I love alcohol and I love the look of it and I I want it to be my bar, but it's not my bar. We're getting rid of it. >> So, all right. Whatever. >> No, you're getting rid of your bar. >> Tell Robin to call me. You can't get rid of the bar. Sorry. >> I lost this battle. Um, so we got two quotes. One of the people we know is a little bit more expensive and the other guy just wasn't getting back to us. So I'm like, "All right, well, go with this person. It seems like I guess sort of reasonable." $5,500 was the quote that he gave us to get rid of the bar and clean it up and paint it, whatever. Um, and then the other guy just got back to us this morning, $1,800. And I said, "Well, because we just gave the other guy $2,000 deposit." >> Um, and so I went to chat GBT and I copied and pasted and I said, "Tell me the difference between these two contractors. Is some Why is there such a discrepancy in the price? Is one promising to deliver anything more than the other person is?" And it worked amazing. It was perfect. The output was freaking perfect. So anyway, now I got to call this guy and be like, "Dude, I I need my money back." And or you got to lower your price dramatically. >> Oh, so it didn't say like this other guy is is ripping you off. He was the So the one the higher price is two and a half time it's it's $1,800 versus $5500, >> right? That's a big deal. >> It's a big difference. Um so all right, I'll let you know how that goes. I'm a little bit nervous. Be like, "Hey, I need my money back." But I'm going to do it. All right. Uh Ben, you would just say it's fine. Keep my money, right? >> No way. >> Um All right. I am done with pumpkin farms. I'm done with pumpkin farms. I'm just done. >> Oh, thank you. It's They They get bigger and grander every year, don't they? >> It's just enough. Towards the end, I'm yelling at Rob. I'm like, "Just take the pumpkins. I I'm done. I want to go home." >> And then everyone's got to take the Instagram pictures next to the whatever. >> She's 100 feet behind me. I'm online. There's people that are now behind me online and now I have to let them go in front of me cuz Robin's not coming. She's with the kids and I'm like letting people go and I just get off the line and I'm mad. I'm like I screaming. She goes, "You sound like a crazy person." I'm like, "Yeah, I want to go. Been here for long enough. I got >> I hate those places too. Kids." But here's the thing. We We've been so busy with kids sports. We just realized this morning we're My kids go, "Wait, we don't have pumpkins yet." And my wife going, "Oh my gosh, pumpkin film pictures. >> I'm jealous." >> And we just realized that we have no time to go to a pumpkin farm. And I'm going, "Yes, >> it's awesome. >> Yes, I I'll get them at the grocery store. Don't worry. Who cares?" >> Yeah. Not me. >> We're going to throw them out anyway. >> All right. before recommendations real quick. Um Paul Warner on blue sky said looking to differentiate this this a new system hallid which is an original name of Xerox hired a Greek scholar at Ohio State University and coined the term zerography from two Greek roots meaning dry writing. Halloid changed his name to Halloid Xerox in 1958 and Xerox in 1961. So they literally made up they literally did make up a word. Zerography wasn't a thing. Huh. Good for them. >> Yeah. Um all right. Recommendations. I got a lot this week. God, >> I watched I Like Me, the John Candy doc on Amazon Prime and John Candy was my guy. Yeah. Okay. I think Uncle Buck is one of the greatest movie characters of all time. It's one of my top 10 favorite movies. Um, Planes, Trains, Automobiles is obviously one of my obvious favorite movies, too. I I And it's just it's so so good. It's very sad, too, in a lot of ways at the end. Um, but it's crazy how in the 70s there was a group of people that got together in Chicago and Toronto and it was like Martin Short and Bill Murray and Harold Ramis and Katherine O'Hara and Dan Akroyd and Eugene Levy and John Candy and all these people just happened to be coming up at the same time together and it's kind of like one of those lightning in a bottle moments but it was so good and you you got to see all the like how good of a guy he was and all the different parts he played and everything he was in was good. I I Summer Rental and Great Outdoors and he had the small parts in, you know, Vacation and Home Alone and I was a big John Candy guy. Love him. It was very very good. I think >> I want to watch it. I'm I'm not as as big on on him as you were, but I love that you love him and I want to watch it. >> Uncle Buck is probably one of the movies I watched more than any other in my life and I I introduced it to my kids a couple weeks ago and they they loved it, too. >> Is there one in the in the woods that you mentioned with Dan him and Dan Akoid or is it just Dan Aid? >> No, that's him. That's him and Dan Akroyd, The Great Outdoors. That's a great summer movie. Great. Dan Akroyd plays the shooter guy from Chicago. Uh, very, very well. >> You know what's so interesting? So, because you're just a few years older than me, like your your window of movies of your childhood movies is like >> fairly different than mine, at least on the early side. Like those those 80s movies like I just missed them by like a year or two. >> Yeah, that makes sense. Like the whole I remember seeing the preview for Home Alone and going, "Oh my gosh, is this Uncle Buck 2?" cuz he was with McCaule Kulkin and realized, "Oh, that's a kid from Uncle Buck." Um, okay. I also introduced myself, my kids to um Tremors this week. >> Kevin Bacon classic. >> My son, >> wait, why Tremors? It's so random. >> My son loves that kind of cheesy action stuff. Um I Tremors was one of my movies too growing up. I don't know why it was Tremors was just I watched it all the anytime it was on USA. I watched that movie so many times >> and my son watched it like three times last weekend. He loved it and it it just it's it's one of those movies that shouldn't work. It should be way if it was made today would be way cheesier than it is. But it just I don't know something about that movie. It's so good. And you being a horror guy you should love that movie. >> I'd like uh it's so kids don't know what it was like to watch a movie on USA. >> Oh yeah. >> It's like all right we we this movie's uh three hours with commercials and you're just going to sit here >> right and the swear words are bleeped and Yeah. All right. One more. Another movie I watch all the time. It was on rewatchable, so I rewatched it again since it was Robert Redford month. Um, Sneakers. Do you ever watch Sneakers before? >> I never watched Sneakers and I never saw the Natural. >> Okay. We, my daughter and I sat down to watch the Natural this week, too. And I I said he's like Otani on the Dodgers basically in real life. Uh, but Sneakers is one another one of those 90s movies that I watched all the time. My mom and I loved that movie and it's just a great like spy and it's it feels a little dated now, but it it's and the cast of that is Dan Ero's in that as well. It's amazing cast in that movie. Great movie. And I I think Robert Redford might has he has people always talk about like James Earl Jones and Morgan Freeman. I think Robert Redford has one of the best voices ever. >> Oh yeah. >> How's that? He because he he um did the voice over for River Runs through it, too. He's just got a great voice. >> Um did you finish Task? >> We didn't do it yet. I was watching the Lions game last night. >> Okay. Um >> what do you think about the finale? >> Great. So just HBO is just better than everything else. I mean, obviously Ruffalo. Oh, so there was a there was a no no spoiler. There was a scene at the end uh in the courtroom where Ruffalo just was amazing. Amazing acting. >> The acting in that show was is amazing. >> The character Mave I thought was the strongest. >> She was good. >> The the dude who played Robbie, I forget his name, was excellent. >> Yeah, he's the guy from uh he was in Ozark. He I think he's fantastic. >> Yeah, it was it was a very good show. And I love because I even do think that episode six and seven had quite a bit of fat in it. Like more character stuff than I than I love. But I love those seven episodes. >> Yeah. >> Love >> that. That's Yeah. >> Um Oh, I Okay, I almost forgot about this. I saw I saw one battle after another. >> Okay. >> All right. It was a good movie. It was a very good movie. It didn't drag even though it was very long. It wasn't like It wasn't like um I didn't fall. It wasn't bored. But but um and there's some there's some some great stuff in there. Some really cool camera stuff that the film nerds love. And it was a good movie. It just was. It was it a $170 million budget good movie? Uh, wild. But I just People love PTA and I don't get it. And I don't want to be a hater because I like the movie. I really did. I really did like >> So it's like a seven out of 10 maybe. >> Uh, no. It's better than that. I would say like it's like a 74. Like it's a good movie. It is a good movie. >> You're right. that that's why I told you you can't trust the film nerds anymore cuz they they're blinded and they just say everything is the greatest thing they've ever seen. >> I just the the PD the PTA adoration. Now I'm just a movie guy. I'm not a film guy so I just don't get it. >> Yeah. >> Um All right. Last All right, real quick. Let's run through this. It's Halloween season. So I did come up with uh my 10 favorite horror movies. Now this is no particular order and I to be honest I didn't spend a ton of time on this. So is this the definitive final list? No. But it's my list and there's no nothing obvious in here, okay? No Friday the 13th, no Halloween, no Scream, no Blair Witch, no The Ring. Like, I don't think there's any movies on this list. In fact, there are no movies on this list that did like $50 million at the box office. So, nothing mainstream. Okay, here we go. >> These look like names that you all could have just made up and I wouldn't have known that any better. >> Um, now I do love found footage. I love a good found. They just scared the be Jesus out of me. uh where it's either either found footage or when they hold the recording. Yeah, found footage. I guess that's what it is. Dead stream was one of those host. H post host they did during the pandemic. It was it was a Zoom call with with five teenagers and things went ary and that scared the hell out of me. Speaking of hell, Hell House LLC. Hell House LLC. Great one. Great one, Ben. I think I think you might like that one. Um all right. I saw this movie when it came out in 1995. I've I've spoken about on the podcast before. What year was this? 94. Insane. My dad took me to see this when I was nine. And this movie gave me nightmares for months. My mom was very upset that I saw this. Uh, In the Mouth of Madness is a John Carpenter movie with Sam Neil. You ever hear of it? >> No. It sounds like it could be a porno, though. So, the concept is Sam Neil is, is he an agent, a literary agent? I don't even know. But like this, this author, this famous horror author goes missing and they go to find him and then they get wrapped up and like he's writing the movie. It's very meta. Very good. All right. VHS, similar to Hell House. While there's multiple of them, VHS is also a found footage one. The most recent one is is a Halloween version. There's probably five or six of them. Always slap. Uh, all right. And then the next few are demented. The Dark and the Wicked. Uh, The Dark and the Wicked is quite dreadful. Just just hurts to watch. Borderline painful. Speak No Evil. Not the American version. Not the American version. Not the American version. Uh, Green Room. I don't know if Green Room is horror per se, but I don't know what other genre you would put it in. >> Okay. I actually tried to watch that. I couldn't make it through it. >> Very gnarly. I would say grizzly. That's That's grizzly. Um, Eden Lake, also a Grizzly movie that is with uh Beth from um Yellowstone. And lastly, uh perhaps the the cake taker of demented films is When Evil Lurks. I think that was an Argentinian one, but I'm not 100% positive. >> Okay. >> And >> Greener was the only one I've ever heard of here. >> Argentinian horror movie. >> And uh well, >> you said you're not a film guy. Uh so here I I had a realization this weekend. We went to one of those horror things in the woods, right, at our local ski place. And it was a it was a path you followed and it was it was meant to scare you, right? And so we went with my daughter and her two friends. They're 11. And people would jump out and the people dressed up were really really spooky looking. It was very well done. >> I don't like that. That's too that's too much. >> See, I wonder about So like honestly, I had zero I was My daughter's like, "Why are you laughing?" I was laughing at it while I was going through. It didn't Nothing scared me. It didn't do anything for me. and my daughter and her friends are freaking out, right? Cuz they're jumping out and they have cleavers. >> I I' I'd be terrified. I I get very scared of horror movies. >> So, I think that's why you like for for whatever reason, the the horror thing doesn't do anything like it doesn't bring about any emotions for me at all. And that's why I don't like these movies. >> All right. You're not alone. I just I find it bizarre. >> It's personal. Yeah. Anyway, >> for me, I there's often times, in fact, I would say 90% of the time where I will either have to like mute it while I'm watching. Like I prefer to watch Halloween during the day because I get very I I close my eyes. I get scared and maybe that's why I love it. >> All right. See, that's it. For whatever reason, it just doesn't hit me that way. So, to each their own. >> Okay. Well, quite a few. >> That's why there's that's that's why there's a market. >> You're a brave. >> Um idonshop.com. We have a brand new animal spirits mug for the fall for all those hot chocolates, coffee, tea, right? Um very well done. Thanks to the production team as always, Duncan, Dan, John, Travis, who else am I forgetting? Nicole, Rob, Graham. Appreciate you all. >> Uh, email us, Keith, uh, animal spirits@compoundnews.com. And we will see you next time. [Music]
The Zero Dollar Club | Animal Spirits 435
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Transcript
Today's Animal Spirits is brought to you by Y Charts. After a decade of near zero rates, bonds are back in the spotlight, which means clients are asking tougher questions. Is credit risk rising? How do ladders compare to funds? Are my income strategies still holding up? >> That's why Y charts just rolled out bond level data on more than 6 million securities integrated right into the same platform. Top advice is already used for equities, funds, and proposals. With this update, you can quickly spot credit and duration risk, illustrate ladders versus funds with client ready visuals, and deliver proposals that show the full portfolio picture, not just the equity sleeve. This is cool. A lot of advisers love the individual bond securities. So, do clients. So, tons of advisers are already taking advantage of this data. So, check it out for yourself today and get 20% off your initial Y charts professional subscription when you start your free Y charts trial through Animal Spirits. New customers only. Welcome to Animal Spirits with Michael and Ben. Michael, I told you I know you didn't want to talk about the AI bubble anymore, but I want to talk more about sentiment in general. >> Hold on. You're you're you're putting charts into my uh into my doc. I never said that. I never said I don't want to talk about the AI thing anymore. I merely said I feel like it's all we're talking about. Can't avoid it. >> Oh, okay. Two weeks ago, you said you wanted to do an entire episode with no AI talk. Remember? >> Impossible. >> Do you forget this already? >> Failed. >> All right. All right. So, I want to talk about the the difficulty engaging sentiment these days. So Bloomberg has this chart and they show that the S&P has gone nearly 100 days without a 5% pullback and the average is around 97. So we're right about there, which is kind of kind of crazy that it's been that long. Um, and this whole article was about like, hey, listen, turbulence ahead. Expect more volatility. We haven't had this 5% correction. It's coming. Um, and they did. Do you do you look at these AI takeaways from all these articles now? It's like the very top of every article now. Wall Street Journal, Bloomberg, AI takeaways. Nope. I still I still I still read the articles manually. Okay. The whole thing is just talking about how like stocks are due for a pullback. It's, you know, I my wife is still a Today Show watcher. Which one does your wife watch? Because >> Good Good Morning America. >> Good. Yeah. So, everyone has their one. My wife has She doesn't even watch it really. It's just on in the background. Okay. And she had it on on I think this was Sunday morning and the whole they had a whole expose piece Willie Gist talking about are we in an AI bubble? I did a little screenshot here of my TV. It it's weird because on the one hand you'd say listen, no bubble in history has ever had so many people call it in advance, but I think you could also say no bubble in history has ever had this many people that that are giving opinions all the time. So I'm reading I'm listening to not reading the 1929 book by Andrew Sorcin. That one on your list? >> I'm I'm going to do it the old fashioned way. I'm going to read it. >> Okay. Way too long for How many pages is it? It's way too long for me to read, so I had to listen to it. Credit to him. I I didn't even look at the back yet until just now. He's got Von Turnalow, Walter Isacson, Beverly Gage, and John Meechum writing reviews. That's that's uh that's the Mount Rushmore reviewers. >> Okay, that makes sense because this this feels like a biography in the sense that there could have been some stuff in the chopping cutting room floor. Okay, no offense. That's how I feel about all biographies, right? But this is it's a story and I'm a huge fan of the reading about the Great Depression. It's weird. It would be weird to say I'm a fan of the Great Depression um because that's obviously a really bad time in the history of our country. But he it's way more stories and anecdotes than I ever thought before, but there's a really in and ton of good characters and there's some that it's like some some that's a little too much, but then you hear these anecdotes and stories you never heard before. So he has a whole chapter on Jesse Livermore which is excellent and he talks about how there was this story in the New York Times in 1929 called the magnet of dancing stock prices and I actually found this. I think you showed me this. The New York Times has their archive, right? That's why I pulled up the actual story and um it's funny because a lot of it does and people keep asking Sorcin about like does this period time period kind of make you feel like the 1929 peak a little bit and so it this is from the article despite setbacks the broker's wires again become clogged with orders for stocks from all parts of the country. Tips fly about freely. Violent advances and declines in leading issues are a daily occurrence. This is the best part that reminds me of today. It is quite true that the people who know the least about the stock market have made the most money out of it in the last few months. And Jesse Livermore stepped in and he he essentially said, "I'm using this as a contrarian indicator. All the amateurs are making way more money than the pros. I'm shorting the market." And he >> he made he made like a hundred million I think in 1929 >> and he made a 20 ton of money. And this isn't this is an a quote from the article that I've never heard before. He said um stocks could be beat but no one can beat the stock market. >> I thought was a really good Yeah, I've never heard that one before. It's really really good. >> Uh yeah. Um so anyway, it talks about how he used this and he he used this this sentiment shift to short the stock market and made a ton of money. >> Can I ask you a question? You think Livermore was a there he is or was he a that guy? >> Well, they said he he really liked to show off his apartments and his cars and his nice clothes and so >> he might he might have been a this guy. Yeah, he wanted to be Oh, there he Oh, there he is. One of those guys. Um, but anyway, I just my whole thinking is I don't think that you can use these indicators as well anymore as you did in the past because there's just so much of it everywhere. It was it was very confined in the past. You wouldn't it wouldn't be shoved in your face all the time. I'm glad to hear you mention that because I feel like the noise of the sentiment that that's I've been on that corner for a while now and you could look at 10 different pieces of information data and make 10 different conclusions. Now, of course, the best is to just make a composite. But even then, which investors are you talking about? I've said this a million times. Are you looking at Schwab investors? because their Azax report paints a lot much different picture than what you're seeing on Reddit or Wall Street Bets or the Robin type of young like so and then to the point about the media the media covers the stories and the bigger the story the better their ratings and so they are dying for a bust right like that would be a very yeah that would be a great story so I think you're 100% right it's it's just it's very difficult >> to talk about indicators the way that we used to because how many over the last decade have we could we point to now listen once in a while they work obviously right like they're not they don't all not work >> but I keep coming back to Jensen Wang signing a bra and the Nvidia watch party was that two years ago at this point >> right >> now if you zoom out >> so many instances like yeah >> if you zoom out and this does become an 80% wash out which I very much don't think is going to happen but if that were to happen in the future 50 years from now, people are reading about today. Well, does it matter if these indicators were 24 months early in the grand scheme of things? Yeah. But to your point about the financial media, I've made the point that the financial media was cheerleaders for the dotcom bubble and and no one in the financial media called the 2008 crisis. They were all flat. >> They want they don't want to be embarrassed again. >> Yeah. So the fact that the financial media is more negative about everything going on, right? And and pointing out all the risks all the time, there's a reason for that. That's learning learned from past behavior. Um but I I I think it's funny though because you see so right now the the worry is what regional banks and um BDC's and maybe private credit and and there's there's so many of these worries. I put this chart in here about the 10-year Treasury yield back under 4%. remember 3 months ago when people thought >> treasuries are at 5% that means we're imposing fiscal discipline and bond vigilantes and here we go inflation is taking off and I think all these little things people worry about I think it's worth reminding people that the majority of them just kind of fall by the wayside and people forget like oh remember we were worried about that doesn't matter anymore >> well that's that's that's got to be your default position for most things now it doesn't mean that you're being complacent and you're not worried about risk >> because as investors risk should be first and return should who cares? They'll take care of themselves. So, you have to be disciplined and it's not to be, oh, nothing matters. But it's okay. How about this? If there's two extremes, everything matters and nothing matters. Probably nothing matters is is the better default position. And that's that's where I landed on this this BDC stuff. I've been doing a lot of reading on it. And the truth is, we're all guessing. Nobody knows. Nobody's nobody knows where the cockroaches are. Nobody's reading the loan documents. I know as much as everybody else. I read the same >> How about this? Sometimes there is only one cockroach. Sometimes it is your first rodeo. And sometimes you haven't seen the movie yet and you don't know how it ends, >> right? Yeah. I love it, Ben. Um, but the the so my default position with this is yeah, there's some bad behavior going on and there are some there are some bad loans being made. No doubt about it. There's no doubt about it. There's too much money coming to the space. People are are lack of days. There's no I have no doubt about it. But does that mean that this is systemic risk that is going to take down the financial system and BDC is the canary in the coal mine? Maybe it could happen, right? We'll see. But I don't that can't be that your default case unless you really know something that everybody else doesn't. Unless you really know. >> I'm sick of people warning me about systemic risks. Like I'm I'm at the show me point of stop telling me this could lead to something down the line. Show me when it does. That's where I am at because everything that people have warned us about, none of it has mattered. Right. Well, >> none of it. >> Most of it. >> All right. Speaking of hedging systemic risks, I wrote a blog post about why I don't own any gold. And it's it's a tough position to be in because So, here's our friend. >> Yeah. I would I would not be pounding the table on why we I don't we don't own gold. Like, it's, you know, gold is kicking ass. >> I'm not pounding the table. I want to explain myself. So, Meb Faber says, listen to his tweet. Going to be a lot of uncomfortable conversations at year end when people ask why their portfolio manager or adviser doesn't own any gold. been a menace this year. So, I thought like perfect time to explain the reasons behind why I personally don't own any. >> Well, we don't own we don't own gold for clients and there's there's people that are asking about it. >> Yeah. Not because gold is gold is a headline asset. >> Here's the here. Yes, it is. When it's doing well or when it's not doing well. Here's the thing, though. Like when me says there's going to be a lot of uncomfortable conversations. You could say that every single year about any single asset class. Why don't we own Bitcoin? Why don't we own biotech stocks? Why don't we own >> But but but gold gold is a gold is a different beast than all of those things. Gold is not biotech stocks because gold is when gold is flashing on the front pages of the of the paper of the USA today. >> It gives potentially uncomfortable feelings about the system, about the dollar, about confidence in in the economy, in the political system. Like it is its own beast. And people don't ask about biotech stocks or any other asset class the way that they own ask about gold. >> Yeah. And I and I heard from there was some crazy gold people who who gave me the business a little bit on this. Um, and it's funny because I the the real true gold bugs. It's funny. Even when gold is working, they're not happy, right? They're they're not because it's like, of course, the system's going to the system hasn't failed yet. Like they want the system to fail. That's the only time they're going to be happy. But there's a lot of people who wrote me and said, "Listen, I put 5 to 10% in gold as an insurance." A lot of people said use the word insurance for me uh for why they own gold. And I thought that that's a that's a completely fair reason. It's a hedge. It's an insurance. It's it's the dollar falling. It's all this stuff. And and I get it and gold is one of the most unique asset classes that there is. It really does march to its own beat. And I think so like the case I I tried to paint a nuanced picture here. Like I totally understand the case for owning gold. I just >> I do I do think last week you're you were a bit harsh on this podcast saying that like none of what they said came true. Like it felt like uh it felt beneath beneath you. You're punching people when they're winning. It felt it didn't feel didn't feel great. >> Okay. I I listen I just I it was it's more the charts than anything. It's a chart I was I wasing a chart crime. >> I know I know where you're coming from. You're thinking like, "Oh, the dollar is going to blow up. The system is going to melt down and therefore gold is going to be your savior." I know what you were saying, but in a vacuum it felt it felt uh harsh. >> I am an optimistic person and I'm anti-doomerism. So that that maybe that's where I'm coming from is that I I don't like the people who are constantly trying to use scare tactics. And so my page of course >> those chart crimes and stuff just kind of are but listen the people who own 5 10 15% or 20% in gold or whatever obviously they don't think the system's going to fall. It's an it's a diversification volatility rebalancing because that piece makes sense to me obviously like I I get that from a portfolio management perspective here. Let me just walk through why I don't my personal opinion on it. So, I did this thing in the in the in my post where I looked at the return history of gold and gold went crazy in the 70s mainly because Nixon ended the peg to gold with a dollar, right? So, it was up like 1,400%. So, that it's a huge and it was playing catch-up because it was pegged all those years. >> I feel like that that whole period the the the bubble and the aftermath sort of has to be removed from history because >> it is a true one of one will never happen again. So, it's almost like irrelevant a little bit. Now I know it also it also coincided with with inflation and so that's part of the story. So we can't do that >> oil shocks and >> so but my my point is if you look at gold in the 80s 90s 2000s and 2010s you had three out of four decades where gold was in a loss decade. So in the 80s and 90s gold and obviously part of that was the overhang from the 70s. Um but that whole period I'll be honest that that whole three out of four decades of having a lost decade and going nowhere. Um, now you could say I'm cherry-picking cuz if you start in 2000, hey, gold looks pretty good. You start in 2020, like there's time periods where gold does look better. >> I just that that whole period of of multiple decades in a row where you have you go nowhere. And now some other people said, listen, you're you're comparing gold to stocks. That's the wrong comparison. Compare gold to bonds. And if you look at the long history, like deodorant has the return history going back to 1928 for gold. And actually, gold returns going back that long are closer to bond returns actually. Um, and and obviously some people would say, "Well, why do you have to choose? I could do gold and I could do bonds and I could do both." You don't. >> So, and and I'll be honest, I I was wrong about this. I kind of thought Bitcoin would take the shine, pun intended, off of gold a little bit. >> So, that this it surprises me that Bitcoin didn't knock gold down a peg. I because I'm more of a I guess a techno optimist. Um, and I I would have thought Bitcoin would have had a bigger impact on gold. So, I was wrong about that. But that that's the reason. It's it's more of a market history thing for me than than anything. And and the people own it. I understand it, but I just I personally could never wrap my head around it. >> Fair. Anything to add? >> Um I mean this is it's such a big conversation. It's like I feel like you could spend an hour on this. There's a great book, The History of Gold or The Power of Gold by Peter Bernstein. >> Yeah, gold. Gold is an interesting unique >> and it's been around for thousands of years, too. So that that could be part of it. >> I guess the the only Yeah. Listen, I mostly I mostly agree with you. I don't look old gold either. We don't know if our clients, so we're we're on the same page. The thing that the thing that it's like again the the decade of the 80s you really have to take with a grain of salt because that happened after one of the greatest runs of all time, >> right? So I think it's I think it's more fair to look at like maybe rolling returns or how it diversifies the 60440 portfolio. Uh do you need gold? Obviously we don't think so. Do I wish we own gold this year? Absolutely. Um, I guess like anything else, I would say that know why you own it. If you don't if you didn't own it now, is now the best time to really dive in? I mean, probably. >> I think that's that's the point. I I But there's I think there's always going to be something that you go, man, I wish I owned that. Or so so uh Verdad Capital did this really cool chart where they show the US equity market in a 60/40 portfolio going back to 1975 and they look at what was the diversifying asset and and you see that see these colors how it changes. So it's in some instances it was international equities and REITs and gold and factors and fixed income and commodities and it changes every 2 to three years where it's like the this is the diversifying asset. Now you could say listen I'm going to own them all and as a someone who is a diversified investor I like being widely diversified but I also don't think that you can own everything. Remember following 2008 crisis in 2010s everyone talked about how you need to own managed futures and some people would say listen you have gold in managed futures and you'll be fine. do they just do it trend following. Um but to me that was like I understand the appeal for managed futures. It just doesn't fit in my portfolio purview and that's okay. >> I mean you >> and you have to be okay not owning everything >> right. You can own everything. You definitely can. But if you do, depending on the rapper in which you own it and the visibility in which you own it, there is a high degree of likelihood that at some point you're going to rip something out because it just doesn't work. Or I'm using air quotes, it hasn't worked over x period of time. And the more you expose yourself to different asset classes, the more likely you are, not everybody, but in general, the more likely you are to point to something say, get rid of this piece of It's not working. Why do I own it? >> That's the thing. And the problem is you do that and then you add something else that just did well and then you're investing in the rearview mirror. That's the problem. Yeah, you you just have to be comfortable with what you own and why you own it. >> Um I understand why people own gold. >> I just personally don't. That's all. >> Yep. Okay. Um >> remember this chart Mike Bird tweeted, "Who remember those Fed balance sheet S&P 500 charts?" You don't see those so much anymore. >> And it was Yeah, it's funny. We Yeah, great chart. Um this was the thing. It was all >> liquidity, Fed induced liquidity. And I'm not saying that wasn't part of the story because it absolutely was. But clearly it wasn't the whole story. And I mean AI, my god, not to I I can't not bring it back to that because it's true. Absent absent open AI and what they're doing and the arms race, maybe this would have maybe this chart not in fact not maybe this chart would have looked a lot different. It is highly possible that the S&P would have followed this chart and this relationship would have appeared to be rock solid. >> Were you a Scooby-Doo watcher when you grew up? Oh yeah. >> Okay. So, at the end of every episode, they would the bad guy would say, "And I would have gotten he would tell his whole plan." He said, "I would have gotten away with it if it wasn't for those darn kids and that dog." Right? That's the stock market of the US economy. It's always the bad guy saying, "I would have gotten away with it if dot dot dot dot." There it seems like there's always something and eventually won't be something. >> Sometimes sometimes those those cries are more valid than others. And I feel like this time it is it is valid. I think that >> absent absent open AI, the stock market would not have bottomed in October 2022 and uh we would be singing a different story. >> Yeah. But my point is the US economy, it's almost always something that saves us. >> You're right. And and speaking of October 2022, last week we spoke about um the the fun you have debating when a bare market started, when I when a bare market ended, when a bull market started. Well, it is it is unequivocally true that the market did bottom three years ago and Yuri Timmer wrote a piece on where we are year three of the bull market. The bull turns three. So, this next segment is sponsored by Fidelity Trader Plus. They allow you to trade seamlessly across all your devices from anywhere. If you want to learn more, check out Fidelity Trader Plus. Let's look at some of charts in in this note that he put out. So, >> some of the best charts in the game, too. >> He's um Does he have the crown? >> I mean, they they just look the I don't know how he does it, but um and if you missed it, he was on Ask the Compound with me a couple weeks ago. We we just did a whole thing where I just we went through all of his charts. Um it was fantastic. >> You know what? I I think you could crown him. He's certainly on Matt Rushmore, but he's um Yeah, he's the king of charts as far as I'm >> The good thing is is that no one's charts look like his. >> Yeah. Yeah. Yeah. All right. So, the first chart that I wanted to pull out, he looks at cyclical bull markets. the median length and he does them with dots and the size of the dots represent the cape ratio over that period of time. I've never seen it broken down this way. So this chart also it adjusts for inflation. So look at like for example look at the 1978 cyclical bull market. Look at look how tiny those dots were. >> Oh okay. >> Money, right? So, I think what stands out to me on this chart is this is right down the fairway because there's another line and you just go to the show notes to take a look at this if you're not if you're not watching the video. There's another line that shows like the average path or like a band and this is following to a T. >> That's interesting. So, this is so we had a textbook bare market like non-recessionary bare market and this is a now a textbook bull market coming out of it. >> Here's another great one. So, Yuren says the first year of a bull market typically begins with PE expansion as price discounts and earnings recovery and then in year two the baton gets passed to earnings growth as valuation compresses. Not this one. So, take a look at this. I've never seen it broken down this way. So, he has um he's showing the price from the low. He's showing the PE from the low and then he's showing the earnings per share from the low and the price as we mentioned already right down the fairway. PE on the higher side and earnings growth pretty much steady as it goes like right in the middle. Then the next chart shows this and this is the this is the key takeaway at least for me. For as much as we talk about bubble euphoria um expensive stocks peak earnings and maybe look at this. So Yuri's chart shows the stock market on top and on the lower pane he shows the EPS growth and the PE year-over-year. The PE has only grown by 1% over the past 12 months. Only 1%. Not a lot of multiple expansion there. 11% earnings growth. >> So yeah, the this recent period has been almost all earnings driven. It's fundamentally driven, right? That's >> exactly what you want to see. >> And it's not a huge spread either, right? It's it's pretty there's a lot of huge spreads on this chart. So look at what happened like in the rebound in November in uh the spring of the spring and the summer of 2020 that was all multiple expansion. You had earnings shrinking, duh, right? Obviously, and you had pees supporting the entire rally, >> right? Which is because in 2022 the PE ratio dropped by a considerable amount. >> And that was an interesting observation, too. In in 22 obviously multiples got crushed and earnings Yeah. earnings fell certainly or or they came off the highs. Let's say another weird period in time, you know, all everything's a weird period in time. >> Yes. No, this if you look at just compress this to this decade look at it's it's crazy. It's all over the map. And obviously that that's the COVID and supply shock and inflation and all that stuff. If anything, the most normal part of the period is right now, >> right? The the last 6 12 months or so. >> Sure feels it. >> Everything before that was crazy. >> That was a that was a JK. Um all right. Uh Balchunis tweeted $1 trillion with two and a half months to go. He's talking about ETF flows. Unbelievable. Unbelievable. >> So look at look at the biggest flows. Uh V, IVV, SGV, and VTI. And then then IBIT, which is the Bitcoin. So three out of the four are just big stock market ETFs. And then short-term treasuries. >> Um keep asking this question. I don't know that there's an answer that's not very simple. Where is all this money coming from? I mean, listen, part of it just has to be inflation, doesn't it? It is funny that three out of the top four S&P 500, but >> No, no, I'm saying like the fund flows like is it is it is it merely earnings? Like American people earning a lot of money and then putting it into the stock market? >> So, if we're looking at >> Yeah, I'm sure that's obviously the biggest source of it. Like, duh, but it just seems like so much money. I I would I would need to study this further, but how much of this could possibly be baby boomers retiring, rolling over 401ks into IRA, and that money is going into ETFs and and money going into financial advisors. >> That's a >> you need to see the other side of the equation with mutual funds to understand that. >> Okay. >> But >> yeah, you know what theory >> that's a that's a I'm going to say what that that's obvious. That is 100% happening. >> That that's probably part of it. So is that two-thirds of the pie or maybe more? >> Or I mean think about our business when we have people come to us who have individual stock holdings that they made a ton of money on. What do we what do they want us to do with that? Diversify it. >> Yeah. >> Out of the concentrated position into funds or Right. So I think that's probably part of it. It's not the whole thing. It's part of it though. >> Well, hold on. Maybe twothirds is underestimating it. It's earnings and it's and it's that what what's what other pieces can there be? where the money coming from. I you know where else would it come from? Can be just Yeah. >> earnings and uh 41k stuff. All right, we cracked the code. Good stuff, Ben. Um this is a great one. Since 2020, the value of equities, who tweeted, Daily Trek, the value of equities held by households has risen 300% for households under 40, 542% for the final 50% of households, and 50% for the middle 40%. The 10 to 50% of households. This is uh via Citadel Rubner. There's a wonderful chart. Um >> that's really good. This is really good. >> So the value of equities held by the middle 40%. That is steady as it goes for the most part. Now there was an inflection in 2020, but the under 40 this chart is worrisome and I love I love that people are in the game. I love that they're speculating. >> Wait, wait. You're worried about this? I think this is fantastic news. >> No, no, no. Worried? I don't know if that's the right word. Let's just say that I think that this one is the most susceptible to drop dramatically. >> Okay, that's fair >> because as a lot of these DGEN names, and I don't mean that disparagingly, um I would assume that this is not cool to say, but listen, I'm I'm sorry. I don't know what else to call it. A lot of these nonprofitable names that have gone up and to the right, which is what this crowd owns, they are going to crash. So I think my thesis is and again I think this is fantastic news that pe younger people are more represented by the stock market. This is great. >> So do I by the way three trillion that's that's a hell of a lot of money. Wow. >> If if you look historically the the really bad it takes a really bad period for young people to throw their hands and give up. So after the 70s when the death of equities happened it was young people who gave up. Older investors stayed invested. Young investors said I'm out of here. after the 2008 crisis and and we saw two 50% crashes, it was young people and millennials that said, "I'm done with the stock market forever." So, I think it would take, especially since people are more diamond handhy these days and used to crashes, I think it would take an extended period and probably a financial crisis to get young people to say, "All right, I give up. I'm tapping out." >> 100% concur. Can I take umbrage with something that I just said? Now, I've mentioned this in the past, but it's been a while. So, for newer listeners, there's times that I say stuff on the show that I acknowledge sounds completely idiotic and I'm about to do it where I will listen back to something I said two days ago and said, "Whoa, whoa, whoa. Nope, nope. You're wrong." And it's me. I'm calling myself out. So, we've got takes flying all over the place. So, if you disagree with something that I said, there's probably a good chance that I would say, "Yeah, you're right. That was stupid." Uh, all right. So, what did what do I disagree with myself 30 seconds ago about this inflection point that you saw in 2020? I think that if you were to look at the aggregate holdings of this younger cohort, it most likely is dominated by the mag seven names. Okay. It is most likely dominated by the blue chippers. Not >> there's probably there's probably more ETFs and index funds in here than most people realize. >> Yeah. So, it's not to say that those can't fall 50%. Of course, they can. But the names that I were just referencing, the nuclear, the uranium, the quantum computing, all the names that are up a,000% of the last 12 months, that's the names that I think are at some point going to crash. And I also think that that is probably a relatively small, let's call it less than 10% slice of the pie, >> right? Yeah. These people are the these people are the gamblers, too. They're they're on the Reddit or they're on their sports stuff gambling. Like this is just I don't think that crowd. It's going to take a really bad bare market to get that crowd. >> Yeah. And now I also I also think that these people are smart. Like they they know what they're doing. They know that the the music is playing. Now there's some true believers who think that these companies are the future. And maybe they are. >> And they've also they've jumped from the meme stocks of GameStop and AMC to these other to AI stocks to quantum computing to like these pe these people who are speculating this stuff. They've been jumping from idea to idea, have been stuck in something, >> have been have been making a hell of a lot of money. So, I don't begrudge. This is not shot and for if if it doesn't crash, I would. Great. Wonderful. >> Credit to you for saying that word correctly because it's always hard for me. >> Yeah. No, I'm I have no rooting interest for these people to lose money. I I don't like when people lose money. Um, all right. So, so at speculator_io tweeted a list of these companies. It's called the Zero Dollar Club. Um, and there's uh >> Wait, why is it zero? because they don't make any money. >> That's right, Ben. That's wild, huh? Forget about money losing companies, like companies that like basically have little to no revenue. Like serve Robotics is on here. We've joking about that cuz cuz I think it's a name that Josh might have owned in the past. Um, we were looking at their earnings report and it was it like $400,000 AR. I mean, it's like a joke. It's like a it's like a seed. It's like a star. It >> is funny that on this chart they list price of sales and price to earnings for everyone is at NA. Um, and then it shows the year-to- date returns and it's just it's it's hilarious. I mean, absolutely a wild scene here. So, >> so obviously the B and I I don't follow these these DGEN socks very closely. The the market caps for these were pretty small to begin with, but now they're all like relatively large companies. >> Yeah. >> Like look at the size of the market caps on these things. >> Yeah, dude. These are these are not small names. Um, >> they're not tiny anymore. >> So, what's the biggest name on here? Uh, as Space Mobile, AS is the ticker. Uh, I will admit I am not familiar with this name. This is this is a young man's game and I'm no longer a young man. That's 37 That's $ 35 billion. Ollo is 25 billion. Regetti is 18. QuantumCape is 10. Joby is 15. Uh, >> big companies now. >> And listen, these allegedly are going to be the companies that that change the world. So, I'm I'm hoping that they work. Okay? Don't don't get it twisted. I'm not I am not looking to pound my chest if these names crash. I think everybody's consensus that these names crash. >> There's no way that a pasta is going to change the world. Regetti Computing is never going to change the world. I'm I'm willing to say that. >> I'll also say like there is a reason that these stocks are are doing what they're doing. And now there's always a reason and it doesn't mean that it's not being taken 3,000 steps too far, but there's a reason. So Morgan Stanley has a national security index. Who tweeted this? I want to give this person credit. dividend talks. Um, so 39 companies across four major industries worth watching. They're looking at nuclear energy and uranium battery batteries and energy storage, rare earth and strategic metals and lithium. And a lot of these names are in this list. And so if these are deemed to be national security type stocks and the government gets involved and puts them on our balance sheet, lol, uh maybe maybe the valuations might not make sense, but maybe they might maybe they might be elevated for a reason. So, getting back to my Scooby-Doo analogy with all this stuff you're seeing, like if this economic recovery or economic expansion continues in the years ahead, people are going to go, "Well, if it wasn't for robotics and if it wasn't for self-driving cars and if it wasn't for all this this new energy sources, the economy and the stock market would have rolled over." That that's going to be the story if this thing continues, right? They're going to like It's kind of crazy to think we're people are debating the AI bubble, but we haven't even got the robotic side of things yet. Yeah, >> like I actually think here's my take. I think if an AI bubble does burst, I think it will be a glorious, glorious buying opportunity because the AI stuff is going to work eventually. Robotics is coming along. Like you could, if there's a 20 to 30% bare market because the AI stuff gets too far ahead of itself. It is going to be an unbelievable buying opportunity for the years ahead. >> I need a humanoid in my house that can do all sorts of tasks. one of them, uh, electrician, plumber, uh, cleaner, all this sort of stuff. I I need somebody I need a a robot to look at my Wi-Fi connection and figure out what the hell is going on because I've had Verizon in here three times. And you know, these extenders, there's I used to have an Orbee at my old house. Now I've got these EOS. Are they just complete? Are they just selling us because we buy it? >> I can't prove that it works. I can't even prove that it's on. I see a yellow light. It's not working. >> Yeah, I use some Google ones. I agree. It's hard to tell if it really makes your Wi-Fi better or not. >> I just feel like this >> I've got two or three of those throughout my house, too. I really don't know. >> This is the American consumer. Oh, an extender. Yeah. Yeah, I need that. Yeah, extend doesn't work. >> That is true. Um I don't know. But think about I I've said this before. All the baby boomers in the years ahead when they when they get to old age and need to be helped, like we're going to need we're literally going to need robots to help take care of them in old age cuz they're never going to leave their house, right? Like millennials aren't are too selfish to take care of them. Sorry, millennials. It's true. Yeah. >> Uh we're going to need robots to help take care of people. All right, >> here's this. This is worrisome to me. Uh a million people tweeted this out. Uh ETF Tracker says this. There's 13 new five times single stock ETFs that were just filed with the SEC. AMD and Amazon and Coin and Google and Strategy and Nvidia and Palanteer and Tesla and all the companies that you know >> and ether. Wait, so what happens on the day that Ether fell had a 30% draw down? Does this five times leverage? Does this do you do you owe this company? Do you owe the stock exchange money? How does this work? >> I mean, a million people made this joke, but this is the Onion headline of Gillette saying, "It we're doing five blades, which they did eventually, but I uh Come on, what are we doing here? This is This is the kind of thing to me that is going to lead to a flash crash someday." Like there's taking stuff too far. >> Yeah. Um Yeah. This is this is crazy talk. I also don't know how much I'm bothered by it. I would want somebody I would want like Nodic to say like, "Dude, this this is this is the type of stuff to Ben's point that does flash crash system cuz in a vacuum I don't give a about people gambling cuz that's clearly what this is, right?" And that's like obviously the the world that we live in. And so to each their own, >> there will definitely be people that use these. >> Now, if if this if this poses like market structure risk, then ban it immediately. To that point, Dave Dondic does weigh in here and he says, "If I was making odds here, I suspect that these will be nixed by the SEC staff as soon as they come back to work and clear off their desks. There's a government shutdown." Uh Dave says, "But that's part of the strategy. Thanks to the ETF rule 6C11 and recent generic listing standards, as crazy as these filings may seem, they are actually quote normal. And thus, if the SEC doesn't explicitly kaibash them, they go live in 75 days. If this shutdown drags into the end of the year, a whole lot of products are just going to appear without a weather eye and it will all come down to how conservative velocity. All right, whatever. This is crazy town. So, if their strategy is to sneak it through while the government is shut down and I guess from a business point of view, kudos to them, right? Like, you know, they're doing business and this is business. But my goodness, if this is where we are, this is uh Yeah, >> I know. I I don't love it. I I get it. people are going to do what they want and the pendulum obviously just keeps swinging. I I just if we're going to get the deregulation, can we please make it in places where it matters, especially the housing market? Just I like is the deregulation really just going to be we're going to let people blow themselves up with these different strategies. Let's make it easier to build houses. Come on. What are we doing here? >> Um all right, there was a article in the Journal of China betting it can win a trade war is playing hard ball with Trump. Last week, Beijing imposed sweeping restrictions on the export of rare earth minerals which are vital to consumer electronics and the tech industry. Trump then threatened additional 100% tariffs on China. All right, so China knows what they're doing, right? They're trying to mess with our stock market. They know that Trump is going to cave. I mean, they they have seen this movie before and they do know how it ends. >> It's now taco day. It's not just taco Tuesday. It's taco seven days a week. >> Yeah. Uh and speaking of China, I just want to make one thing. Last week we spoke about about uh about Beijing versus the United States, the book Breakneck, who's going to win. And when I said those people about China, just to be very clear, I don't mean the Chinese people. I mean the government. Right. I'm not disparaging a whole nation. >> Oh. Oh. Because they control everything. Yeah. >> Yeah. I'm not dispatching a nation of three billion people. I'm talking about the government specifically. And then >> No, no, you don't have to say that. Cancel culture is over. >> Ah, fine. Um, so I also wish that so I didn't finish listening to the book while we were having that conversation. And towards the end they were talking about like people defecting and leaving China and not thrilled what's with what's going on. And I wish I would like to amend my answer of last week like oh they're a tough opponent and who knows how it's going to play out. Who knows what's going I I they they are a very tough opponent and yes who knows how it's going to play out. >> Yeah, that was interesting. He basically saying a lot of the people who are wellto-do and not wellto in China are saying I I'm not going to I can't take this. I'm out of here. >> Yeah. So, it's not it's not like black or white where there's going to be, okay, here's the winner. Here's the loser. Like, it's obviously shades of gray and everything else, but but if I we're gonna win, like I How could you just not believe in in in freedom and human rights versus a centralized authority authoritative decision maker that gets to do whatever they want to their people? Like, so answer amended. We're we're we're going to win to the end of the >> Here's the thing, though. I I I have faith in the US system as well, but in something like this, in a trade war, they can take pain way more than we can. So, in a trade war, I would put my money on them. Like, >> yeah, because they don't give a They don't they don't care about their citizens and their the livelihoods of their people the way that we some of the stuff they described in the book is is truly horrific And they the the ability for them to tolerate pain on their society is next level compared to ours. >> We can't as we should. >> Yeah. So the fact that we did cave and it it it's better late than never I guess. But if you after reading that and you and I are still macro tourists, but now I think we consider ourselves like 20% China experts. Um if you read that read that book or listen to the book, you you realize like we never had a chance in this trade war against them. The way that they produce products and how far ahead of >> laughing. >> Yes, they've been laughing this whole time. Um so the Wall Street Journal says the US is tiptoeing away from many of Trump's signature tariffs. Uh, apparently they're exempting a lot of the products because they're goods that the U we can't make in the US and can't produce in the US. Um, and duh, of course this makes but at this point then we should just probably take them all back and just like let's let's chill here because it does seem like it's all small businesses that are the ones that are dealing with the pain here. The large businesses have the margins. If they're dealing with they're fine. That's why the stock market hasn't cared as much because someone asked I think my dad asked me a couple weeks ago. He said, "Man, I guess I was totally wrong about these tariffs because I thought for sure it was going to sink the economy and the stock market if you just look historically how bad tariffs can be." And I told him like, "No, you don't get it. They they went back on all the biggest stuff that impacted the biggest parts of the economy in the market. That's why it's still having an impact just in different different ways." >> Totally. Um, and when I say totally, I have to admit I wasn't listening. I was typing. I I apologize. That was rude. But I had to I did have to send something. >> That's okay. The over under for parlay on how many times Michael's gonna ignore Ben for this this episode was set at four and a half. >> Oh, under that that's one time. >> All right, that's at least two. All right, so there's a chart from the Financial Times showing the heavily shorted the heavily most heavily shorted US stocks have raised higher this year and it shows the most shorted stocks since 2020 versus average US equity returns. And so this is the top 250 stocks that are he in a heavily shorted basket with a market cap above 300 million. Um >> that just quote >> it has not just outperformed recently. It has literally outperformed the entire decade now. It's raised way higher recently. Now I have I have two ways of looking at this chart. Okay. One is man this stuff is out of control. This is insane. Like speculative whatever. The second way to look at this is why are hedge funds so bad at shorting stocks? >> Well, there's a third way. There's a third way. >> Okay, >> so the first one is what was the first one? >> This is a speculative. This is crazy. It's so speculative and oh my gosh, this control. >> Yes. Why are hedge funds so bad at shorting? I know they're so bad at shorting. I think it's >> obviously they did not learn their lesson from the GameStop fiasco. Correct. That's surprising to me. >> All right. So it's a combination of speculation unleashed on society and in trading apps the likes of which we've never seen, right? Bucket chops >> Reddit Reddit one >> bucket shops made it very difficult to speculate >> and even in the 60s right when when these these brokerages got just literally they they couldn't fill all the orders. Remember that one was what was that book? The go-go years once in Gokan one of the John Brooks books. >> Yeah, go years. Okay, the other part of this potion is in a technological revolution like we're in right now. The money losing companies that people would short and say these aren't real businesses. They get the benefit of the doubt because you are in a believe everything bull market. >> Yeah. Right. It's funny though. >> So all of all of these names like yeah, this is a speculative bull market with new technologies. The companies aren't making money because what? They don't need to, right? Like they're they're just they're not there yet. It's like that thing in um in in Silicon Valley. No, no, no. Revenue is the worst. Don't show any revenue. >> So it's funny though because I I tweeted about this and I gave my two things like saying one, speculation is out of control. Two, hedge funds are terrible at shorting. And Jim Chainos, a fame short seller, replied to me and said, "Even another way to put it, despite clear outperformance from such stocks, long only managers still generally underperform the market." And it's like everyone loses. But the thing is, this this decade is literally the only people winning are retail. >> Yeah. >> Like retail dgen traders or retail just I'm going to buy what I know. Those are the only people outperforming the market. >> As uh as somebody who is not on the other side of those people, you love to see it. Now, I can't imagine the frustration from the professional investors >> fundamental head. I'm I'm guessing like a David Einhorn or something like that would look at balance sheets of >> I can't I can't I can't I can't imagine the pain of I this doesn't make sense. I've seen this movie before. I can't imagine what that is like to live through. Um and I'm happy that I that I don't >> short selling stocks just it's you have to be wired differently. I I would never be wired to try to short anything. >> Oh, no. I'm a sheep. I I I I need I can't I can't take the the pain of people being mean. >> All right. This is interesting. Let's talk about crypto. This is from Kelchi. They have a bet. Will Bitcoin be above $200,000 by 2027? And I think the the it's does it hit that at any point in the year, which is not that far away. And it's essentially it's a little it's like 53% say yes above 200,000 by 2027. Feel like that's that's exactly where the odds should be. Feels like a coin toss. >> Really? Like a a double essentially in the next two years and a half. Two years. >> Yeah. >> You think that should be a 50/50 proposition? >> I mean um >> that seems those odds seem way too high for a double. >> Okay, then bet. No. >> I All right. I think I I >> I mean if this if if it's free money, Ben, pick it up. >> All right. Obviously, it's not free money because there is the the tail Oh, there's that Grand Rapids hedge right there. >> Yes, but I that that I'm sorry, that number should be 25%. >> Okay, then that's grossly mispriced and you should pick up those dollars. >> Yes, I think I will. How's that sound? No, I I don't do these prediction markets. Come on. Kind of degenerate. Um, all right. Let's talk housing for a second. You just bought a house. Um, so this has nothing to do with your purchase, but I think it's it'd be really hard to be bullish andor positive on the housing market right now for a number of reasons. Uh, here's some charts from Red Fin. Uh, the home sit on the market a lot longer. So they, this is median days on the market has gone from like 20 to 50, which is a lot. It's going up and to the right. Um, shares, most houses are selling for under list price these days. Uh the median down payment obviously has hit a record high. This is kind of crazy. So it's $70,000 uh on a US on a median home these days. This is surprising to me though. Um where's the chart? Oh, I didn't put it in here, but they they show that the average down payment is still roughly 20%. I'm surprised people or the median down payment. >> I'm surprised people haven't lowered that. Um but listen to this. So this is it seems to me like it's just the people with it's a shrinking group of people who are can be the buyers. And you mentioned this. You said like listen, we had like one or two people check the house out essentially, right? It was a small pool. >> So this is from a Red Fin article. With the housing market in a downturn, the people who are buying are those who are financially comfortable, secure in their jobs, and have money ready and waiting in the bank for a down payment. Said this guy who's a agent in Austin, Texas. For example, a few months ago, I helped a buyer close on an $800,000 home with a 50% down payment. They were able to liquidate stocks to make a 400,000 down payment without thinking too much about it. And now their monthly payments are lower. That's the wealth effect right there. >> Yeah. Austin is one of the worst areas of the housing market right now. >> Yes. Texas and Florida sound like they're in in a kind of a world of pain. And I don't know. I'm starting to think like the people have people have decided like listen the prices are just too high in a lot of a lot of areas >> and I'm just going to sit out. >> Okay. I I am on the other side of this. I I I don't think it's hard to be bullish about housing. I think that um >> what's your bull case? >> Rates come down. Rates continue to come down. No, that's it. That's the whole king kaboodleoodle. I don't think it's a down payment per se. I think it's uh I think it's the monthly payment. It's just crushing people. >> I' I feel like I've been on that corner for a while now and I'm I'm wondering if the the level of rates is lower than we assume to get people to really because rates have been falling this year. >> I I think we're right there. Like I think that like once we get to five and a little bit under, I think I think housing activity can explode. >> All right. I I've had that same feeling for years now. I'm starting to like backtrack on it a little bit. >> I don't know that I'm saying that prices are going to explode higher, but I think that activity is going to I think activity could moon. >> I still think that there's a lot of people >> I don't think people stopped wanting to be in a house. I think it just became completely unaffordable. >> I also think that >> Go ahead. The difference between buying and renting in some places is so wide now that I think a lot of people just said fine, I'll just keep renting. It's not worth it. >> Yeah. Well, that is that is definitely what happened. >> All right. Um cool chart from we we talk about this all the time like am I rich? Well, tell me where you live. Right. >> Right. Um flowing data has this cool chart where they they broke out housing costs by state. Um and it's are you paying more or less than the national average. Right. And it looks like Alaska and Delaware are right at the national average. Of course, places like Washington DC, California, New Jersey, these places are way above. So, California is 60% higher than the national average for housing costs. Um, but it's funny that there are more states that are below the average national the national average than are above it. So, the places that are really expensive, California and Hawaii and these places, they pull up the average a lot. It's a huge huge difference. >> Yeah, this is really good stuff. >> Yeah. Anyway, >> um all right, let's do some let's do some quarter stuff. I uh I do keep saying this. I do love hearing from the companies. Um and we've had people say like, "Mike, you keep saying the CEOs won't lie. What are you talking about?" All right. I think what I'm saying is >> that is that that's a fair push back. >> Uh totally. So, let me be let me be clear. If they are forced to report every 90 days, the ability for them to hide parts of the story that they don't want you to hear goes up dramatically because if you give them 180 days, they can maybe think that they could figure it out. That's human nature. Don't don't tell anybody, we'll figure it out. >> If you report every 90 days and there's cockroaches and you don't tell shareholders, you're out. Your stock will get crushed. the board of directors will remove you from the position if you lie to your investor so blatantly. So, are there a million examples of that happening? Yes, there are. Absolutely. Um, and I think that if you were to if you were to remove the 90-day increments, that would only happen with an increasing uh amount. >> I agree. The the level of analysts looking into things and asking questions, >> they kill you. So, I only mean that that CEOs are incentivized to tell the truth only because everything's public. That's all. That's all I'm saying. If they could lie, oh, yes, they would. >> Absolutely. >> And obviously, there still will be cases of fraud, but it's it's got to be so much harder today than it was in the past. >> Yeah. >> To to to really fool people. >> Yeah. So, all right. Um, AMX, uh, AMX is just AMX is in the absolute sweet spot of this K-shaped economy. They are a premium product for premium spenders and they are killing it. So, their total build business, it's just it's 6% 8% 6% 7% 8%. That's year-over-year growth. And these are not small numbers. Um, and goods and services and travel and entertainment up 9 and 8% respectively in the recent quarter. Here's the chart that we share every year, um, every quarter. And it just continues to blow the face right off my body. Look at the year-over-year growth of the younger people. Gen Z is 39% growth. Millennials growing 12% versus baby boomers are only growing 4%. And if you look at a percentage of the total, Gen Z is only 6%. With 39% growth, that will continue to to creep up the the the percent of the total. But look at millennials, dude. Millennials are 30% of total spending, higher than baby boomers. How about that? How how crazy is this? Millennials are spending more at MX than baby boomers. Huh? >> Yeah. That is surprising. So, a lot of people would say this is this is bad news, but um >> bad news. >> What's the bad news? >> That people are spending more on credit, but I >> this No, no, no, no, no. Ammex is not a credit card. Ammex is a charge card and you pay this >> Ammex people are not people are not relying on their AMX to make ends meet. That is not what's happening. And to that point, their credit metrics no change. Percentage of card member loans and receivables that are 30 p 30 days past due 1.3% for the last five quarters. These are now again does this speak to the entire economy? No. These are premium spenders. But net write- offs too. There's nothing here. People with money are continuing to spend money. But look at their net card fees. Ben, look at the next chart. >> Yeah, I know cuz I pay them. >> So it was it was a billion dollars in Q3 2019 and now it's $2.6 billion. >> I wonder how much of that is the annual payments. >> That's what this is. That's what this is. That's, >> by the way, speaking of credit cards, this is another one that was Do you remember how many news stories there were about when the US credit card debt hit $1 trillion? >> Oh my gosh. A trillion dollars in credit card debt. >> What's it now? >> 1.2 trillion. It's at 1.2. This is from Y charts. Uh, as of Q2 2025. And guess what? I actually view the increase in credit as for most people, like you say, it's probably a positive because they're feeling good and they're okay. And you're right, most of them pay it back off. So it doesn't it doesn't matter that much, >> right? >> It's an expansion of the pie, >> right? Um all right. So let's talk about Bank of America, a company that serves more or less Main Street, Main Street America, right? Bank of America. All right. Look at their asset quality net charge offs and their net charge off ratio. Is this going higher or lower? Ben, it's >> falling. >> Total net charge offs of $1.4 4 billion decreased by $158 million from the second quarter. Provision, >> how tiny the percentage is, >> it's nothing. Provision for credit losses also down%. >> And if you look at if you look into consumer net charge offs and you look at credit cards falling, Ben, in the first quarter of the year is 98 basis points, down to 90, now down to 82. I'm sorry. I I I know that there are people struggling. Broken horse here. There always are. But >> you said broken horse. >> Broken horse. Broken. What? A dead horse. Beatating the dead horse. Broken wheel. >> You just put broken record. >> Broken arrow. Broken arrow. That's what I meant to say. >> I think you combine broken record dead horse. Wait a minute. I can't remember. I We've do so many podcasts. Sometimes they all merge together. But you asked someone a few weeks ago like if you had one indicator in a few years to know if you're right or wrong, what would it be? And I feel like for you credit card companies, that's your indicator. >> I feel like if >> this is it. I don't don't I don't care about the stories in the journal that are interviewing random people. >> Show me the data. >> Right. We found this one person who is struggling because they have a low income. Of course you did. There's a lot of them. >> Show me the data. And matter of fact, somebody sent us a video that I watched. It was on PBS about the K-shaped economy. And it's it's it's sad as I hearing these personal stories from people like on an individual person basis. It's it's horrible. I hate that there are people struggling. That's not unique to today. There are always but if you look at the aggregate data it is not showing what they want you to believe. >> So I just put the finishing touches on my new book. I'm handing in the edits this week. It's done going away. It's going to come out in the spring. Um and I write about the Great Depression a little bit there. And even after the roaring 20s, which is like the biggest one of the biggest booms for retail households ever, like they got all these new fancy new things in their houses and they borrowed on credit for the first time. By 1929, at the peak after the great decade, it was a one of the better decades we'd had at that point. Um 60% of US households were below the poverty line. >> Wow. >> So like no one no one had any money. Um, and so it's it's like you said, people point to these things and obviously it is sad, but it's an improvement on the past, which is hard to wrap your mind around sometimes. >> Yeah. Speaking of the past, um, one of the books that I'm listening to, and I'll talk about it maybe next week if I finish when I finish it. uh historical records and all these historical books you mentioned the 1929 you know where a lot of the qualitative the good stuff comes from it all comes from diaries >> right yes people kept track of stuff >> right that's what >> my grandfather had a diary we found them when he died and uh reading them was actually pretty brutal >> yeah you know what our diary is called Twitter >> yeah the the yeah prior generations did not have easy lives um >> your your like great grandchildren are going to be like wait my dad my great-grandfather created this pie chart >> yeah he just posting all all well well for for a period he wasn't and then he grew up >> but I mean I the Hamilton one all of it it's based on letters they wrote to people yeah it's it is kind of crazy that's how people because they had they had nothing else to do what else are you going to do besides write a letter at night by candle light TV people had nothing to do >> Bill Simmons always talks about like future generations are going to think Caralone was the greatest power forward of all time and that's why he created this sort of line in the sand arbitrary metric >> that cuts off Carmealone I wonder if future generations are just going to like look at headlines as the arbiter of truth. Like just they're going to look at Google searches and newspaper articles as if that represented the the reality of what was happening. >> I think history is going to be rewritten a million times because there are so many opinions now. I think in the future people are going to be able to look back and pick and choose and they're going to be able to create the history that they want. So it's history is going to be very hard to discern going forward. >> It'll be a choose your own adventure. Speaking of that, I had this I had this really dumb, obvious, not profound thought the other day about because Kobe Kobe is reading uh Goosebumps. I told him to get see if those books were still around. So, he got one of the ones and I was like, "Oh, man. I remember this from my childhood." Yeah, books don't disappear obviously, right? We're reading books that are hundreds of years old still. And I was like, "Oh, wow. Good. Goosebumps is still around." Uh, yeah, of course it's still around. >> No way. >> Yeah. Uh, all right. This was a this is a this is a tweet on the internet from boringbiz people wildly underestimate how hard it is to be wealthy. The bull market has cooked everyone's brain and reality is that almost people that most people will not come out wealthy on the other side. Many will be stuck as our paper wealth evaporates. Being sustainably wealthy is grueling, requires years of hard work and building up skills and relationships. The people trying to tell you that that you can side hustle or day trade your way to wealth are selling a complete lie. I agree with most of this. I fully agree with that last sentence. >> I do. I think that most people will not come out wealthy on the other side. Depends what the other side looks like. Um, so you could you could, you know, quibble with that maybe on on where the market is in a couple of years. But the people the people trying to tell you that you could side hustle or day trade your way to wealth or some complete lie. Amen, brother. >> I agree with that. I actually think I disagree with the first part of it, though. Um, I think it's never been easier to be wealthy than it in the past. We talk about the the Vanderbilt stuff and them squandering it all. That would never happen today. I think there are so many experts and advisers and consultants and lawyers these days. If you're an extremely wealthy person, it's never been easier to hold on your wealth. >> Yeah. >> Yeah. Fair. I get Yeah. I guess he's probably talking to like the self-directed young men >> that are 23 that think that like they're going to be wealthy for the next forever and ever. And I think for that cohort Yeah. He's right. >> Yes. Right. And yeah, the paper wealth thing, it's true. It's not real until you until you make the sale. Right. >> Yeah. >> Um on the other side though, you can say like, listen, if I don't sell, I don't lock in the loss, >> right? >> Zero. Am I right? >> All right. This is nuts. Speaking of wealth, uh our colleague Patrick Haley shared this. I think it was a Boston Globe article um talking about how to deal with like cognitive decline as you get older and health problems and how how are the baby boomers going to deal with this? Um, and they show this chart that shows uh wealth and death gap of US adults over 60. And it breaks it down by people over 60 and what part of the wealth cohort they're in. And so the top 10% the death rate is like 11% and the average age of death is 85. If you go down to the bottom 60 80% the death rate is closer to 20% and the average death age of death is 79. So as you go lower down the income scale or the wealth scale, the death rate increases and the average age of death is earlier. This is this is a crazy chart, is it not? This is nuts. >> Yeah. Also, what you would the numbers are are are startling, but also what you would probably expect. No, >> I guess I just didn't expect the gap to be that large and that. So the bottom 80 to 100% the average age of death is 76. If you go up to the top 10%, the average age of death is 85. >> Yeah. >> Nine-year difference. That's crazy. >> It is. >> All right, we got to talk about $50,000 cars. I This is just my beat, I guess, because a million people sent me this story about how this the average the average price for a car is now $50,000 according to Kelly Blue Book. Adding to the sticker shock. More than 60 models had average prices of more than $75,000. Um, insane. How much of this is attributable to inflation, which is obviously big. And I think the average price of a new car is up 25% since the beginning of the decade, right? And then we have all these new sensors on the cars and the cameras. And so like the Apple CarPlay, the screens there, there's more stuff in them. So in that in that sense, it makes sense. Cars would be more expensive. But how much is this how much of this is also just people buying trucks and SUVs as opposed to sedans? Like I'd love to know what what percentage of that increase is because of that? It's got be a big part of it. I guess I I suppose you can still get an accord for I don't know 35 38 something. >> So Arbor data and science wrote about this. They they write the average age of the US passenger cars on the road up until the right since 1995. It was 8.4 years. Now it's 14.5 years. They also say that the Toyota Camry, the bestselling car in the US, uh is more affordable than ever. They show it adjusted for the median hourly wage. It used to take 1,600 hours. Now it only takes a,000 hours. >> So >> that's it. That's very interesting. >> But but here's the other thing that I was thinking about. Yeah, 50,000 for the average car does sound nuts. I think that a lot of the SUVs are pulling this up and maybe some of the high-end cars are pulling this up. >> Yeah, it said the luxury vehicles definitely are pulling it up. >> All right, but think about it this way. Because cars are on the road longer than they ever have been because cars have so many more pieces of technology and gadgets and are more durable. It's sort of like the stock market. Like, yeah, the multiple is higher. It should be higher. It's better companies. Is it not the same exact thing with the cars, >> right? The >> notwithstanding the piece of that I drive, >> but Oh, and speaking of pieces of So, my my uh car is my lease on my Wrangler Hybrid is up in April. So, I called my broker or text him and said, "Hey, Steve, I've got uh I'm like six months out. Can I can I get out of this now? Like, the summer's over. I'm not going to take the roof down. I want to get out. He goes, "Uh, maybe. What's your VIN number and how many miles you got?" He goes, "Nope, you're 10,000 underwater." He goes, he goes, "You're you're paying the lease off and then you get a new car." >> All right. Um, not to throw shade here, is it time to fire your car broker because every time you get a new car, you're underwater like immediately. >> No, these this >> an insane amount of money. >> This had nothing to do with him. Um, all right. On the other >> Oh, wait. Duncan Duncan sends us that a new Accord starting MSRP is 28,295. There you go. So you you drive a car long if if this concerns you, you drive a car longer or you get a sedan or so like there are ways around this if if that number is sticker shock is so big for you. But I'm guessing most people will just say screw it. I'm taking an 84month loan now. I don't care. >> Okay, >> that's where probably most people land. Other part of the car story is headlife in Bloomberg. Underwater car loans hit four-year high and new signs of distress. Just over 28% of tradeins toward new car purchases carried negative equity, the highest level since the first quarter of 2021 according to Okay. The amount owed on those so-called underwater loans was $6,900. Not nice in the latest quarter. Um I think that a lot of this was supply chain COVID issues. I also think, hey, guess what, headline writer back, it's not even where it was in 2019. And was anybody writing about this story in 2019? Did anybody care about underwater cars in 2019? Nope. >> Yeah. Aren't most cars underwater by definition? You drive it off a lot and it's 20% less than when you had >> Exactly, Ben. It's not even where it was in 2019, >> right? 2019 it was 34%. >> Yet here we are. And I'm not mad at journalists. I know I've been like hard on them. Like I'm This is the business, okay? and we all do what what what is >> right. No one was talking about this 2019. >> It wasn't a story at all. Nobody gave a And in fact, getting back to why I enjoyed listening to the company call so much. Ally kind of exposed to the auto market. So Sanji Saccharani and analyst asks, "Okay, obviously lots of jitters around some of the cracks that we've seen in subprivate auto and just broader consumer credit trends. Michael, it seems like your metrics don't necessarily suggest a lot of that." Um, okay. So the CEO said, uh, I appreciate there's a lot of macro uncertainty in the environment, but we're not seeing that impact our credit performance. And so we feel good about where we are, where what we're seeing right now. Credit performance day data. Okay, look at the net charge offs. Do you see anything there? Is it going up to the right or is it going down to the right? Look at the delinquencies, Ben. Is it going up or is it going down? This is the this is one of the biggest sum prime lenders in the world. No, >> just wait. Hasn't happened yet. It's going to happen. >> So, um Okay. Uh I saw this morning um on Instagram an image of somebody who looked a lot like Rocky on the beach running with the dog from Rocky and it said, "Oh, I play Rocky." And it said, "Nope, no, no, no, no, no, no, no. We're not doing this. We are not doing this. I don't want a remake of Rocky." No. Hard no. And good news, it's not a remake. It's it's the making of Sylvester Stallone making Rocky, and that I'm in for. >> What documentary? Okay. >> Yeah. >> All right. >> That I'm in for. All right. Daniel tweeted, "I can't believe it's been two years since we brought in audiobooks, premium, Spotify, uh, blah blah blah blah. Audio listening hours up 37% year-over-year." >> It does feel like I've unlocked a new form of of learning in my life with Audible. It feels good. >> Yeah, it does. It feel It feels so much better than listening to most podcasts. a lot of the garbage I listen to. I still have some garbage that I listen to because >> I listen I listen to Sean and Chris uh talk about the best horror movies of 2025. Um and I loved it and I do love it, but it feels nice to mix in a little bit of uh education every now and then. Um all right. Uh two quick things. I know we're running long here. Sorry, Duncan and team. Um so I got the house that I bought. There's a bar in the basement area and we don't really have like a place for the kids to play. There's no like there's no that that is the basement. There's no up, you know. So, >> the great thing is eventually the kids graduate from play areas. We took the play area and gutted it and turned it into a media room. >> Yeah. >> Didn't didn't need it anymore. >> Yeah. Um I can't wait to get there because I'm I'm going the other way right now. So, there's a bar in the middle of the room and I love it cuz I love alcohol and I love the look of it and I I want it to be my bar, but it's not my bar. We're getting rid of it. >> So, all right. Whatever. >> No, you're getting rid of your bar. >> Tell Robin to call me. You can't get rid of the bar. Sorry. >> I lost this battle. Um, so we got two quotes. One of the people we know is a little bit more expensive and the other guy just wasn't getting back to us. So I'm like, "All right, well, go with this person. It seems like I guess sort of reasonable." $5,500 was the quote that he gave us to get rid of the bar and clean it up and paint it, whatever. Um, and then the other guy just got back to us this morning, $1,800. And I said, "Well, because we just gave the other guy $2,000 deposit." >> Um, and so I went to chat GBT and I copied and pasted and I said, "Tell me the difference between these two contractors. Is some Why is there such a discrepancy in the price? Is one promising to deliver anything more than the other person is?" And it worked amazing. It was perfect. The output was freaking perfect. So anyway, now I got to call this guy and be like, "Dude, I I need my money back." And or you got to lower your price dramatically. >> Oh, so it didn't say like this other guy is is ripping you off. He was the So the one the higher price is two and a half time it's it's $1,800 versus $5500, >> right? That's a big deal. >> It's a big difference. Um so all right, I'll let you know how that goes. I'm a little bit nervous. Be like, "Hey, I need my money back." But I'm going to do it. All right. Uh Ben, you would just say it's fine. Keep my money, right? >> No way. >> Um All right. I am done with pumpkin farms. I'm done with pumpkin farms. I'm just done. >> Oh, thank you. It's They They get bigger and grander every year, don't they? >> It's just enough. Towards the end, I'm yelling at Rob. I'm like, "Just take the pumpkins. I I'm done. I want to go home." >> And then everyone's got to take the Instagram pictures next to the whatever. >> She's 100 feet behind me. I'm online. There's people that are now behind me online and now I have to let them go in front of me cuz Robin's not coming. She's with the kids and I'm like letting people go and I just get off the line and I'm mad. I'm like I screaming. She goes, "You sound like a crazy person." I'm like, "Yeah, I want to go. Been here for long enough. I got >> I hate those places too. Kids." But here's the thing. We We've been so busy with kids sports. We just realized this morning we're My kids go, "Wait, we don't have pumpkins yet." And my wife going, "Oh my gosh, pumpkin film pictures. >> I'm jealous." >> And we just realized that we have no time to go to a pumpkin farm. And I'm going, "Yes, >> it's awesome. >> Yes, I I'll get them at the grocery store. Don't worry. Who cares?" >> Yeah. Not me. >> We're going to throw them out anyway. >> All right. before recommendations real quick. Um Paul Warner on blue sky said looking to differentiate this this a new system hallid which is an original name of Xerox hired a Greek scholar at Ohio State University and coined the term zerography from two Greek roots meaning dry writing. Halloid changed his name to Halloid Xerox in 1958 and Xerox in 1961. So they literally made up they literally did make up a word. Zerography wasn't a thing. Huh. Good for them. >> Yeah. Um all right. Recommendations. I got a lot this week. God, >> I watched I Like Me, the John Candy doc on Amazon Prime and John Candy was my guy. Yeah. Okay. I think Uncle Buck is one of the greatest movie characters of all time. It's one of my top 10 favorite movies. Um, Planes, Trains, Automobiles is obviously one of my obvious favorite movies, too. I I And it's just it's so so good. It's very sad, too, in a lot of ways at the end. Um, but it's crazy how in the 70s there was a group of people that got together in Chicago and Toronto and it was like Martin Short and Bill Murray and Harold Ramis and Katherine O'Hara and Dan Akroyd and Eugene Levy and John Candy and all these people just happened to be coming up at the same time together and it's kind of like one of those lightning in a bottle moments but it was so good and you you got to see all the like how good of a guy he was and all the different parts he played and everything he was in was good. I I Summer Rental and Great Outdoors and he had the small parts in, you know, Vacation and Home Alone and I was a big John Candy guy. Love him. It was very very good. I think >> I want to watch it. I'm I'm not as as big on on him as you were, but I love that you love him and I want to watch it. >> Uncle Buck is probably one of the movies I watched more than any other in my life and I I introduced it to my kids a couple weeks ago and they they loved it, too. >> Is there one in the in the woods that you mentioned with Dan him and Dan Akoid or is it just Dan Aid? >> No, that's him. That's him and Dan Akroyd, The Great Outdoors. That's a great summer movie. Great. Dan Akroyd plays the shooter guy from Chicago. Uh, very, very well. >> You know what's so interesting? So, because you're just a few years older than me, like your your window of movies of your childhood movies is like >> fairly different than mine, at least on the early side. Like those those 80s movies like I just missed them by like a year or two. >> Yeah, that makes sense. Like the whole I remember seeing the preview for Home Alone and going, "Oh my gosh, is this Uncle Buck 2?" cuz he was with McCaule Kulkin and realized, "Oh, that's a kid from Uncle Buck." Um, okay. I also introduced myself, my kids to um Tremors this week. >> Kevin Bacon classic. >> My son, >> wait, why Tremors? It's so random. >> My son loves that kind of cheesy action stuff. Um I Tremors was one of my movies too growing up. I don't know why it was Tremors was just I watched it all the anytime it was on USA. I watched that movie so many times >> and my son watched it like three times last weekend. He loved it and it it just it's it's one of those movies that shouldn't work. It should be way if it was made today would be way cheesier than it is. But it just I don't know something about that movie. It's so good. And you being a horror guy you should love that movie. >> I'd like uh it's so kids don't know what it was like to watch a movie on USA. >> Oh yeah. >> It's like all right we we this movie's uh three hours with commercials and you're just going to sit here >> right and the swear words are bleeped and Yeah. All right. One more. Another movie I watch all the time. It was on rewatchable, so I rewatched it again since it was Robert Redford month. Um, Sneakers. Do you ever watch Sneakers before? >> I never watched Sneakers and I never saw the Natural. >> Okay. We, my daughter and I sat down to watch the Natural this week, too. And I I said he's like Otani on the Dodgers basically in real life. Uh, but Sneakers is one another one of those 90s movies that I watched all the time. My mom and I loved that movie and it's just a great like spy and it's it feels a little dated now, but it it's and the cast of that is Dan Ero's in that as well. It's amazing cast in that movie. Great movie. And I I think Robert Redford might has he has people always talk about like James Earl Jones and Morgan Freeman. I think Robert Redford has one of the best voices ever. >> Oh yeah. >> How's that? He because he he um did the voice over for River Runs through it, too. He's just got a great voice. >> Um did you finish Task? >> We didn't do it yet. I was watching the Lions game last night. >> Okay. Um >> what do you think about the finale? >> Great. So just HBO is just better than everything else. I mean, obviously Ruffalo. Oh, so there was a there was a no no spoiler. There was a scene at the end uh in the courtroom where Ruffalo just was amazing. Amazing acting. >> The acting in that show was is amazing. >> The character Mave I thought was the strongest. >> She was good. >> The the dude who played Robbie, I forget his name, was excellent. >> Yeah, he's the guy from uh he was in Ozark. He I think he's fantastic. >> Yeah, it was it was a very good show. And I love because I even do think that episode six and seven had quite a bit of fat in it. Like more character stuff than I than I love. But I love those seven episodes. >> Yeah. >> Love >> that. That's Yeah. >> Um Oh, I Okay, I almost forgot about this. I saw I saw one battle after another. >> Okay. >> All right. It was a good movie. It was a very good movie. It didn't drag even though it was very long. It wasn't like It wasn't like um I didn't fall. It wasn't bored. But but um and there's some there's some some great stuff in there. Some really cool camera stuff that the film nerds love. And it was a good movie. It just was. It was it a $170 million budget good movie? Uh, wild. But I just People love PTA and I don't get it. And I don't want to be a hater because I like the movie. I really did. I really did like >> So it's like a seven out of 10 maybe. >> Uh, no. It's better than that. I would say like it's like a 74. Like it's a good movie. It is a good movie. >> You're right. that that's why I told you you can't trust the film nerds anymore cuz they they're blinded and they just say everything is the greatest thing they've ever seen. >> I just the the PD the PTA adoration. Now I'm just a movie guy. I'm not a film guy so I just don't get it. >> Yeah. >> Um All right. Last All right, real quick. Let's run through this. It's Halloween season. So I did come up with uh my 10 favorite horror movies. Now this is no particular order and I to be honest I didn't spend a ton of time on this. So is this the definitive final list? No. But it's my list and there's no nothing obvious in here, okay? No Friday the 13th, no Halloween, no Scream, no Blair Witch, no The Ring. Like, I don't think there's any movies on this list. In fact, there are no movies on this list that did like $50 million at the box office. So, nothing mainstream. Okay, here we go. >> These look like names that you all could have just made up and I wouldn't have known that any better. >> Um, now I do love found footage. I love a good found. They just scared the be Jesus out of me. uh where it's either either found footage or when they hold the recording. Yeah, found footage. I guess that's what it is. Dead stream was one of those host. H post host they did during the pandemic. It was it was a Zoom call with with five teenagers and things went ary and that scared the hell out of me. Speaking of hell, Hell House LLC. Hell House LLC. Great one. Great one, Ben. I think I think you might like that one. Um all right. I saw this movie when it came out in 1995. I've I've spoken about on the podcast before. What year was this? 94. Insane. My dad took me to see this when I was nine. And this movie gave me nightmares for months. My mom was very upset that I saw this. Uh, In the Mouth of Madness is a John Carpenter movie with Sam Neil. You ever hear of it? >> No. It sounds like it could be a porno, though. So, the concept is Sam Neil is, is he an agent, a literary agent? I don't even know. But like this, this author, this famous horror author goes missing and they go to find him and then they get wrapped up and like he's writing the movie. It's very meta. Very good. All right. VHS, similar to Hell House. While there's multiple of them, VHS is also a found footage one. The most recent one is is a Halloween version. There's probably five or six of them. Always slap. Uh, all right. And then the next few are demented. The Dark and the Wicked. Uh, The Dark and the Wicked is quite dreadful. Just just hurts to watch. Borderline painful. Speak No Evil. Not the American version. Not the American version. Not the American version. Uh, Green Room. I don't know if Green Room is horror per se, but I don't know what other genre you would put it in. >> Okay. I actually tried to watch that. I couldn't make it through it. >> Very gnarly. I would say grizzly. That's That's grizzly. Um, Eden Lake, also a Grizzly movie that is with uh Beth from um Yellowstone. And lastly, uh perhaps the the cake taker of demented films is When Evil Lurks. I think that was an Argentinian one, but I'm not 100% positive. >> Okay. >> And >> Greener was the only one I've ever heard of here. >> Argentinian horror movie. >> And uh well, >> you said you're not a film guy. Uh so here I I had a realization this weekend. We went to one of those horror things in the woods, right, at our local ski place. And it was a it was a path you followed and it was it was meant to scare you, right? And so we went with my daughter and her two friends. They're 11. And people would jump out and the people dressed up were really really spooky looking. It was very well done. >> I don't like that. That's too that's too much. >> See, I wonder about So like honestly, I had zero I was My daughter's like, "Why are you laughing?" I was laughing at it while I was going through. It didn't Nothing scared me. It didn't do anything for me. and my daughter and her friends are freaking out, right? Cuz they're jumping out and they have cleavers. >> I I' I'd be terrified. I I get very scared of horror movies. >> So, I think that's why you like for for whatever reason, the the horror thing doesn't do anything like it doesn't bring about any emotions for me at all. And that's why I don't like these movies. >> All right. You're not alone. I just I find it bizarre. >> It's personal. Yeah. Anyway, >> for me, I there's often times, in fact, I would say 90% of the time where I will either have to like mute it while I'm watching. Like I prefer to watch Halloween during the day because I get very I I close my eyes. I get scared and maybe that's why I love it. >> All right. See, that's it. For whatever reason, it just doesn't hit me that way. So, to each their own. >> Okay. Well, quite a few. >> That's why there's that's that's why there's a market. >> You're a brave. >> Um idonshop.com. We have a brand new animal spirits mug for the fall for all those hot chocolates, coffee, tea, right? Um very well done. Thanks to the production team as always, Duncan, Dan, John, Travis, who else am I forgetting? Nicole, Rob, Graham. Appreciate you all. >> Uh, email us, Keith, uh, animal spirits@compoundnews.com. And we will see you next time. [Music]